Debt settlement negotiation is a risky prospect.
When you’re carrying too much debt, you’ll likely get a lot of offers from debt settlement negotiation companies. These firms typically propose to help you get out of debt fast while paying your creditors far less than what you owe.
It sounds promising, but in practice debt settlement negotiation carries a lot of risk. This approach requires you to stop paying your creditors and to make payments to a debt settlement negotiation company instead. That money is put into a savings account and, after a certain period of time, the company tries to negotiate a debt settlement agreement, offering your creditors a lower amount than what you actually owe.
Sometimes it works – but often it doesn’t. Your creditors aren’t obligated to accept a lower amount. Debt settlement negotiation offers no guarantees and it won’t stop collections agencies from continuing to harass you. Once you stop paying your bills, your credit rating may be severely damaged and you may need to seek out credit repair counseling. And in the end, you may have paid a debt settlement company hundreds or thousands of dollars and still owe the same amount to your creditors – or even more, if they have added fines and fees to your total.
When you need guidance to sort out the pros and cons of debt settlement negotiation and other credit solutions, American Consumer Credit Counseling (ACCC) can help.
ACCC offers alternatives to debt settlement negotiation.
ACCC is a nonprofit organization providing free credit counseling to individuals nationwide. We also offer a range of low-cost services to help consumers with financial matters around housing, student loans, bankruptcy and debt management.
Our certified credit counselors are highly trained experts at helping people just like you to make a get out of debt plan, and at helping them to stick to the plan over time. At ACCC, your credit counseling session is free and includes a detailed analysis of your finances as well as a list of personalized options based on your situation and goals.
Benefits of debt management over debt settlement negotiation.
Depending on the results of your financial analysis, a debt management plan may be an effective option for credit debt relief – and a much safer path than debt settlement negotiation.
With a debt management plan, you’ll work with a credit counselor to create a manageable budget – something you can live with while you pay down your debts. Next, we’ll contact all of your creditors to gauge their willingness to lower your monthly interest rate, accept a lower monthly payment or re-age your accounts. These steps can help to reduce the amount you owe, allowing you to pay your debt off faster.
Finally, we will set up an account where you can make one monthly payment to ACCC, and we’ll use those funds to pay your bills on time each month. Bottom line: you’ll get the help you need to create a disciplined plan for paying down your debts.
Learn more about debt settlement negotiation and ACCC’s programs.