Unsecured Debt Relief - How A Credit Card Debt Settlement Works

1. Research study! Research! Research study! You will hear me say this lots of times. As a customer, it is our responsibility to be informed and notified. The illiteracy, laziness, or in my case, REJECTION, gets us in trouble. I pledged to never again be an uninformed consumer. With that in mind, I put all of my efforts into finding the best debt settlement options. I invested 4 weeks and about 40 hours on the phone talking with different companies. There is a barrage of information out there. Simply by typing financial obligation settlement into Google, you will get 8,650,000 outcomes. Click on this link. Insane. It is intimidating to cull through these resources and decipher what the hell they are offering. I made the effort to comprehend my alternatives. My very first calls were to the obvious big companies like Credit Solutions, Ameridebt and CuraDebt. However I likewise looked into some of the lesser-known business like Pacific Financial obligation. Here was the basic offer: * I was to deposit $2000/month into an escrow account. * The very first 6 months of these payments into that escrow account would go towards paying the debt settlement company for their services. * I would continue to make $2000 payments for roughly 36 months. * As settlement offers came in, they would consult me. * The banks would be paid from this settlement account. * In 36 months, I would be out of debt. Initially, I was extremely ecstatic and relieved about an option to my issue. Below are the approximated savings and costs from 2 of the business I talked to. As you can see there is an amazing amount of variation. A lot of that handle the fees and the length of time you take to settle. CuraDebt Strategy If they got a 50% savings on my $130,000 of financial obligation, it would take 41 months of $2000/month payments to leave debt. Total cost consisting of settlements and fees:$ 81,900. If they got a 60% savings on my $130,000 of debt, it would take 36 months of $2000/month payments to get out of financial obligation. Total cost including settlements and costs: $71,500. If they a 75% savings on my $130,000 of financial obligation, it would take 28 months of $2000/month payments to get out of debt. Overall cost including settlements and fees: $55,900. PacificDebt With $130,000 of debt, it would take 46 months of $2000/month payments to get out of debt. Overall expense including settlements and costs: $90,995.

2. ------------------------------------------------------------------------------------------------------------------------------------------------ Pretty fascinating stuff, right!?! After a few days, I saw something that didn't make good sense: * Before I would decrease any of my financial obligation, the debt settlement company would increase my debt on average of $12,000 due to the fact that they make money initially! * All of the companies say the bank offers their finest deals throughout the very first 6 months - however according to their recommended schedule, I would have no money left in my escrow account at 6 months due to the fact that all of that $12,000 would go towards paying the financial obligation settlement business their costs. Which by the way, is for a service they have not even performed. Let me repeat this due to the fact that it is vital. The best deals come at the 6-month mark. Even though I would have built up $12,000 in my escrow account, I wouldn't have actually any money left in there to pay the settlement offer because that cash currently went to pay the financial obligation settlement business!!!! Discuss the contradictions !? In a lot of cases, clients get dissuaded at that point. They drop out of the program and declare bankruptcy. These financial obligation settlement business flourish on our falling out Century Consulting Services glassdoor of the program. They are predatory companies much in the same way the credit cards are predatory loan providers. Remember what I stated about informing myself? I would not be a victim a 2nd time around. So let's review ... this is why most debt settlement companies are rascals: * I pay the financial obligation settlement business $12,000. * In 6 months, the bank makes a deal. * Given that I have no cash in my escrow account, I ask the bank to spread the payments out over the next 6 months so I can have time to accumulate some funds. * The bank declines since most of their settlement offers have a 90-day payment time-frame. * Threatened by liens and judgments, I leave of the program and state bankruptcy. * The bank writes off my debt. * The debt settlement makes pure revenue. I proposed this contradiction to the reps, however their action was foggy at finest. Because I was using the details they provided me to describe this contradiction, they didn't have an answer that made good sense. Instead, they deflected my question by saying they can get a much better offer than I can get myself. WHICH IS TOTALLY FALSE

3. BY THE WAY! It became clear that the rep was simply a sales representative and had no REAL concept about this procedure. As soon as enrolled, I would never talk with him again. As I said previously, let's take ownership and take control. I fell into the financial obligation trap, but I was not going to fall under the financial obligation settlement companies' trap. Please don't be so desperate and sustain more debt when you are trying to leave debt. If you make the effort to run the numbers, you will see most programs do not make good sense. An effective debt settlement company will charge a nominal start-up fee, base their commission on performance AND take their commission AFTER you have actually paid the bank. Noise too excellent to be real? Stay tuned! In the next post, I will talk about how some financial obligation settlement companies hold true consumer supporters.