Posted on November 6, 2007 at 2:30 pm Just wanted to add something, but I'm not sure where to put it. If it's been more than 7 years, then the debt should be written off and you are no longer obliged to pay it. A really dirty trick that some companies are now using is to by this written off debt from major financial institutions. Then they call the people in question and offer to settle the debt. Once the person admits to the debt, then it is once again active and they are once again obliged to pay it and it can again affect their credit score! Also sometimes these new companies might offer you a credit card which seems to good to be true. However, once you accept and receive your new card you will find that you already have an outstanding balance! It's horrible how they are taking advantage of people, so just be careful whenever you are dealing with debt/credit cards. :(

Posted on April 1, 2008 at 4:34 pm There's a little misinformation here. After 7 years it is no longer reporting, somewhat true. There are statute of limitations in each state that can help or hurt a debtor. If an account has a judgment, etc. can extend the time that the debt can report. Check your state SOL, but I do not suggest just ignoring your debt. Either grab the bull by the horns, search for information, ask questions and handle it yourself, or seek help in the form of bankruptcy or settlement.

Posted on April 2, 2008 at 1:30 pm I've been going through the debt settlement process alone since I can't afford the rates most settlement companies charge for their services. It's been absolutely brutal but in the end I believe it will be well worth the effort and sleepless nights.

Posted on April 7, 2008 at 12:02 am tmostuff, How did you handle your settlement?  I am interested in finding detailed information as I need to fix mine.

Posted on May 21, 2008 at 7:47 pm Debt Settlement companies are a business as well.  They aren't in business to hire attorneys, fight to negotiate lower settlements, on your behalf and not profit from it.  This is the way it works, companies that do debt settlement try to settle with banks, credit card companies, medical bills, personal loans, ect.  Let's say they have 50 people with Capitol One and they owe (on average) $15,000.  That's $750,000 the attorney negotiates down.  It's easier to negotiate with a large sum such as $750,000 than it is for an individual to negotiate down $15,000. Nobody wins with a bankruptcy, it stays on your record for 10 years.  Credit card companies would rather recoup some of their money than none at all. It's really simple, if you are struggling with credit cards, are paying the minimum, need like financial relief, and IF it makes sense (you're saving a considerable amount, paying off the debt in minimal time) do it.  If not, you lose nothing but time and leave with more information. If I can address any issues send me over a message. 

Posted on October 13, 2008 at 5:29 pm I was wondering that if I do debt settlement will that ruin my credit? And does it have as much of an effect as bankruptcy?

Posted on October 23, 2008 at 12:41 pm There is another solution. I was wondering if anyone has heard of Debt Management? It is not a loan nor a settlement, it is a program most people are unaware exists. The program was created by creditors themselves in order to recapture the original principle owed to them instead of risking loosing it, and at the same time allowing you to get out of debt about 75% faster while keeping your payments around the same, or in most instances, actually lowering the payment. This way, most of your payment will go towards your balance which will allow you to save a significant amount of time and thousands on interest. It works by making one simple payment that is distributed to all the creditors for you at lowered prenegotiated rates they are willing to offer you for being on the program. Being on the DMP, most creditors will give you the benefit of waiving late/overlimit fees, plus they will report your account in good standing so it will also help you rebuild your credit if you have deliquencies. It is a win win solution that can lower your payment, save you thousands on interest, pay off your debt 75% faster, plus help your credit at the same time. Neither is there a need to pull credit or be within a certain Debt-to-Income ratio.

Posted on January 7, 2009 at 5:56 pm Debt Settlement has become the fastest growing segment of the debt relief industry.  Unfortunately there is a great deal of confusion and mis-information in regards to what this program can and can not do for a client.  So let’s examine this program: The concept of “settling” a debt is really nothing more than paying less than you actually owe.  It is simply the act of negotiation between the borrower and lender based on the borrower’s realistic resources to repay, and the lenders desire to minimize losses.  The fear of being sued motivates the borrower to negotiate repayment and the high cost of litigation, coupled with the potential loss of revenue due to bankruptcy motivates the lender to settle for less than the full amount due. Settlements have probably occurred ever since man began lending things of value to others.  However, early examples of this practice in America indicate the concept may have been developed by an attorney by the name of William Samuel Johnson. Scholar, lawyer-jurist, and politician, Johnson was one of the best educated of the signers of the U.S. Constitution... The son of Samuel Johnson, the first president of King's College (later Columbia College and University), Johnson was born at Stratford, Conn., in 1727. His father, who was a well-known Anglican clergyman-philosopher, prepared him for college and he graduated from Yale in 1744. About 3 years later, he received a Master of Arts degree from the same institution and an honorary Masters’ from Harvard. Resisting his father's wish that he become a minister, Johnson embraced law instead... often serving as a creditor’s lawyer.  Because the process of legal debt collection could take years Johnson often recommended to his clients that they accept a negotiated settlement, rather than engage in lengthy litigation. The practice of settling debts has continued, although most times it has centered on business debt.  With the wide spread use and acceptance of credit cards in the 1970’s and 80’s consumer debt began to rise dramatically.  So did the number of defaults and bankruptcies.  Recognizing this trend, some attorneys who had focused their practice on the settlement of business debt decided to expand.  With this expansion the practice of debt negotiation for consumer debt began to emerge and is now widely accepted as a legitimate and ethical debt resolution strategy and outside a Chapter 7 Bankruptcy, the fastest way out of debt.   A Brief History on Credit Counseling   A closer examination of the history of this industry shows that it was first formally organized in the 1950’s as the National Association for Credit Counseling (NFCC).  The purpose of which was to HELP CREDITORS recover delinquent debts and prevent the loss of revenue brought on by bankruptcy.    Don’t miss this point – this program was designed by those engaged in the collection industry for the sole purpose of benefiting lenders.  As lenders made credit easier to obtain, personal debt began to rise.  This rise in debt resulted in more and more people getting in over their heads and ending up in bankruptcy court.  The credit counseling industry was formed with the intent to maximize revenues for the lenders.        Many people feel that it is still a “masked” form of collections, designed to benefit lenders but providing little service to the client that they couldn’t perform themselves.     You may be surprised to find that the agency receives fees from both you and the creditor.  They receive monthly fees from you in the form of “voluntary contributions.”  Don’t let that term fool you.  Your voluntary contribution is often mandatory and is usually around $30 to $40 per month.  In addition, the agency receives a “fair share” contribution from your creditor.  This can be as much as 4% to 15% of what they collect for the lender.   Think about this for a minute.  The debt relief company is charging you a fee in the form of a contribution.  They are also being paid by the creditor based on how much they collect.  How do you know who are they working for?   In most situations it’s easy to know who someone works for.  It’s the person who pays them.  Imagine you were being sued by a creditor and had to hire an attorney.  You certainly would expect the attorney to be working in your best interest since you were paying his fee.  Would you consider it ethical to find he was also being paid a percentage by your creditor?  Would you be upset to learn that your creditor had agreed to pay your attorney 10% of what he got you to pay them?  It could be considered a huge conflict of interest, not to mention highly unethical.

Posted on January 7, 2009 at 6:22 pm DOES THIS SOUND FAMILIAR: "The way our program works is you would be hiring us to negotiate with your creditors on your behalf. Upon enrollment Power of Attorneys are sent out to your creditors and we inform them that your intent is to settle your accounts, and to please contact us only and not our client. We will take all of your unsecured debts and combine them into one low monthly payment. You maintain full control of the funds throughout the program, you know exactly who is being paid off, and more importantly we don't show up on your credit as a third party agency. Then, as funds begin to accumulate in your account, we will negotiate settlement agreements with each of your creditors. One by one, we will settle each of your accounts until all the debts have been satisfied and you're finished with the program..." If it does it's because you've probably talked to several debt settlement companies already. Debt Settlement is a cookie-cutter industry and the reason you've seen so many pop up in recent years is because it's an easy business model to replicate and relatively fast to get a company out of the red and into the black, it's a money maker; in which here lies the #1 problem. The focus then turns from the clients needs to the company needs; and the goal everyday turns out to be a competition instead of helping clients: It's to sign and enroll as many clients into the program as possible. So you might wonder then what's the payoff for these so called "advisors" that get you to enroll over the phone? The answer is money - commissions! Let me give you a little background on the hiring process of a debt settlement sales person - note the key word: Sales! This sales person comes guised as many titles: Advisor, Senior Advisor, Debt Specialist, Debt Advisor, Consultant, Debt Consultant, even Debt Counselor. The "advisors" that tend to do well in this industry are those who have either been in the mortgage industry or auto industry. The reason for this is because these people understand credit, credit reports, high pressure sales, and the understanding that the more clients that come through the front door the higher the commissions. The hiring process is simple and involves a couple questions: Can you sell? Are you a closer? And if you make it past those two steps, then training simply involves the memorization of a script. Plainly put - it's a joke. Regardless of what your situation is, they are going to do their best to force a square peg (you) into a round hole (them). With all that I've said, I'm a huge advocate of debt settlement and have seen it work because it does work. What a consumer needs to understand is however that just because a company is large, has a smooth talker on the other line, and has affiliations and badges on its website, doesn't mean their best interests are at heart. Would you buy the first car you drive? Or the first house you visit? Treat your finances and debt the same way - look at options. There are other ways to get out of debt other than debt settlement. Find a company that will put you into a program that isn't cookie-cuttered but tailored to your unique situation. Debt settlement should not be confused as a free pass to not pay your bills. If you can afford to pay your bills, then pay them or look into a company that can help you manage your debt. If you can't, then look into debt settlement or bankruptcy.

Posted on March 3, 2009 at 6:59 pm Your unsecured debts can almost all be settled. However, there are negatives to the program and should only be used as your last resort before bankruptcy. You can try to settle these debts yourself or you can pay into a program that will help do it for you. It is the same with Loan Modification for your home. You can do this yourself or you can pay for someone else to do it for you.Usually companies who have a lot of experience with these programs can get you a better deal and so your savings will help to offset your fees. Plus, it helps to put your stress onto someone else's lap.-Sam