Settling credit card debts has been a debt relief option that has been growing in popularity in the past few years. But it is essential that you completely understand what you are getting into when you decide to use debt settlement to pay your debts. The ads on the radio, TV and internet make it sound very appealing, but do not give you the complete story in their promotion.
Debt settlement is a system of debt reduction that allows you to settle a debt for less than the balance. This is done through a negotiation process with the lender. You can do the negotiating yourself or you can let a debt settlement company do it for you. If you opt for a debt settlement company, know who you are doing business with. Some of these companies can be unscrupulous. Look for a company that belongs to The Association of Settlement Companies (TASC). These companies have to demonstrate that they are reputable.
Personally, if I were considering settling credit card debts, I would do it on my own just because of the cost incurred in having a debt negotiation company do it on your behalf. You should be prepared to make the payment for the agreed upon settlement at the time of settlement. This process can have you debt free in about 3 years, but there are other aspects of this process that you need to understand.
Most lenders will settle on old debts only. If you are current on your payments, the lender is most likely not going to want to negotiate. One of the big disadvantages to settling credit card debts is what it will do to your credit. It is going to ruin it. You may not emerge much better than filing bankruptcy. Also, you will be expected to pay taxes on the amount of the debt that is written off.
If you have current debt, you want to talk to a credit counseling company first to see if they can help you. This will not ruin your credit and there will not be any taxes involved. This option consolidates all of your unsecured debts without a loan. If you cannot be helped through credit counseling, this organization can refer to someone that can provide the type of debt relief that you need. Get a quote for debt freedom today!