What it comes to dealing with credit card debt there is not an option that works better than debt settlement.  Sure, there is bankruptcy but not everyone qualifies for chapter 7 which discharges your debt.  The new bankruptcy laws made it harder to qualify for Chapter 7.  So a better alternative to filing bankruptcy is to negotiate with your creditors and aim for a settlement.  In the short article, I will give you some debt settlement advice to help you learn more about it and understand why you should use it instead of filing bankruptcy or using debt consolidation or other debt elimination methods.

So what exactly is debt settlement or is it debt negotiation?  Debt negotiation is the process of talking with your creditors.  Debt settlement is what you negotiate for.  But most people use these terms interchangeably and that is OK.  When you use these terms you are talking about the same thing.

Debt settlement comes up with you and your credit card company when you are several months behind on your credit card payments and the credit card company does not want to lose your account to bankruptcy.  They would rather settle your debt for a percentage of what you owe right now than to go through a bankruptcy and wait some more years to get paid through the bankruptcy court.

In many cases, you can settle your credit card debts for 40% to 60% of what you owe.  This is the same as cutting your credit card payments in half.

You do not worry about the interest rates or lowering your interest rates because when you are several months behind on your credit cards you will get the default rates of 25 to 30% or more.

You also do not worry about your credit score.  If you were thinking about bankruptcy your credit score was going to get ruined anyways.  And it was going to be a matter of public record.  With debt settlement, your credit score will still go down but it will not be a matter of public record.  It will also be easier to rebuild it once you have no debt.

What about debt collectors and debt collection calls?  If you do not like the phone ringing you need to turn the ringer off.  You will get up to 20 phone calls a day or more when you are several months behind on your bills.  Do not follow the common advice and send a cease and desist letter.  Your creditors must be able to contact you and harass you about your outstanding bills.  You have to endure these calls while you are in default and saving money to reach a settlement.

If you try to get your creditors to stop calling you, they will pursue more aggressive debt collection efforts and techniques and possibly even sue you quicker than they normally would if they were calling you 20 times a day.

This may seem counter intuitive to you.  But you want to stay under the radar while you are trying to reach a settlement.

What about taxes and debt settlement?  It is true you will get a 1099 for any canceled debt over $600.  But if you are insolvent at the time of settlement, you can offset the canceled debt by how much you are insolvent.  In many cases, you can offset the entire settled account.  Consult a tax attorney for more information on this matter.

So should I use a debt settlement company?  You will probably be better off doing it yourself.  Most debt settlement companies charge 15% of your starting debt balances as a fee to settle your debt.  So if you go $50,000 this fee would add up to $7500.  That’s $7500 that you could use towards settling your debt instead of paying a debt settlement company.

You would also want to avoid using a debt settlement company because your credit card company may ask you how can you afford to pay a debt settlement company but yet you cannot afford to pay your minimum monthly credit card payments.  And this is a valid question.  So they could get more aggressive in their collection practices and file a lawsuit.

There’s nothing a debt settlement company can do that you cannot do yourself.  Only you will have your best interests at heart.

Next, learn exactly what you need to say and when to say it when dealing with your credit card banks.  Learn how to act and think like a professional debt negotiator for a fraction of the cost.  You can save thousands of dollars in debt negotiation fees by doing it yourself.  And that is the best debt settlement advice I can give you.

Click Here To Learn How To Settle Your Own Credit Card Debt