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How Debt Settlement Services Work

Debt settlement has become an issue for many Americans as they try to settle the debt incurred on their credit cards or through other load services. Using debt settlement services can often be risky because many usually cannot deliver on what they advertise. Most debt settlement services will advertise they can erase and settle all or most of your debt. In most cases this does not happen and even if they are able the settle your debt in some form debt settlement services often charges very large fees. This will usually offset any amount saved on the actual debt and you could end up owing more than you originally did.

Choosing a Debt Settlement Company

If you have to use a debt settlement services there are a few things you should know before using any company. First be aware of what they offer. You need to know the terms and any fees associated with their service. Never use a company that guarantees your debt will be erased or settled for a significantly less amount. There is simply no way to guarantee that a debt settlement company will settle all of your debt.

Be wary of companies that charge a fee before your debt is settled. This is a red flag and can lead to you wasting money on a service you could used elsewhere. Do not use these types of companies as they will usually charge you and not get the settlement you were guaranteed.

You should also be aware that simply because you hire debt settlement firm does not mean your credit card company or debt collector will communicate or negotiate with the firm. It can also affect your credit by using these services.

If you are going to use one be sure it is a reputable company with a proven track record or getting clients fair debt settlements. Also stay away from companies that advise you to stop talking to your credit card company or collector. This is because this will have a negative impact on your credit score and prevent you from getting a credit card in the future.

There are Alternatives

You can retain a lawyer for a small fee and they can handle it for you. By getting a lawyer who is an expert and does not charge a large fee you will be able to better handle your situation effectively. You can also go to a debt counselor. Debt counselors can help you manage your money correctly. These types of people are usually working for non-profit organizations. Their sole goal is to educate you on how to use spend and save your money wisely. They will have a wealth of information you can use to start getting your debt settled. They can also refer you to reputable services and attorneys that will be able to help you at much more reasonable price, and in a good number of cases no price at all.


If you have an overwhelming amount of debt you should not panic because you do have options. Be prepared and do the right amount of research on all of your options. You will need to act quickly, but do not make any hasty decisions as that could cost a much larger sum of money in the end.

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