For one thing, these programs charge 20 to 25% of the original balance as a fee.
Credit card companies have less patience dealing with these institutions. They would rather deal directly with their clients. So dealing with the expensive debt management program has a negative effect and could back fire on you, usually sending your account more quickly to collection agencies that will pursue the accounts in a more aggressive fashion than by doing it yourself.
So:
*Do you want to avoid bankruptcy?
*Do you want to rebuild your credit between 24 to 30months from the settlement date at or before charge off vs. the 10year bankruptcy mark on your credit?
*Do you have more than $5k in credit card debt?
*Are you at the stress point financially? This is where my husband and I were before starting our relief journey into doing our own settlements.
*Do you want to finally find within 6-8months, a final closure to your debt by negotiating the final amount owed for only 50% to 20% of the original balance?
*Do you want to learn what needs to be done with the negotiation process, what to say and when? How to protect yourself with the right settlement letters and the right wording to look for?
If all the above is a yes then the do-it-yourself like we did debt settlement or DIY debt settlement is definitely for you Vs. Settlement programs! Now what is the basic process of debt settlement?
Negotiation is the skill that you are about to learn, not just to settle what you feed your credit card companies monthly but you are going to bring your whole debt total down by 50-80%, do-it-yourself debt settlement. YES! Your creditors are going to forgive the majority of your debt and you will be able to move on with your life within 6months.
It is Important to understand the big picture of do-it-yourself debt settlement and the step by step credit card negotiation process below:
(1) Accumulate eg: $25,000 in unmanageable debt
(2) Decide that debt settlement is the right option
(3) Stop making all monthly payments.
(4) Put money in a savings account or get a loan from family/friends w/ 0% interest, if possible
(5) Identify the "sweet spot" at around 180 days. Best negotiation is between 150-180 days.
(6) Settle for as much as 50 to 80% off the original balance depending on each creditor.
(7) Written proof via a settlement letter. What to look for in a proper debt settlement letter.
PLEASE don't hire a third party to assist you with this because they want a percentage of YOUR DEBT as their commission! The do-it-yourself approach keeps most of the money in your pocket.
Why would your creditors take such low amounts? Creditors get to the point where they know that you are not going to pay the balance off. They are further threatened by the fact that if pushed far enough you just might file for bankruptcy and then they won't get anything in some cases. Yes, they could turn it over to a third party collection agency but then they are going to lose another chunk to them, as a matter of fact, they may sell your accounts that are past the charge off date to collection agencies for 5 or 10 cents on the dollar.
Source: http://www.ArticlePros.com/author.php?Stephen Watson
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