Debt Settlement program startting tomorrow.what should I expect?
L-Train asked:
To make a long story short, I have managed to bury myself with almost $70,000 in credit card debt I did not want to file bankruptcy. I have been able to pay around $1,500 a month towards credit cards consistently which usually cover a little more than the minimum payment. I was doing the math and even with getting interest lower this is going to take me anywhere around 8-10 years. So I decided to join a debt settlement program that allows me to pay $1075 a month for 36 months and it will get me out of debt by settlement. I have never been late on anything before but this month I have been advised by the company I decided to work with to stop paying the creditors. Does anyone know if the debt settlement companies send pfd’s or are they just trying to settle and get their share? What are somethings that I should expect to happen to my credit in the next 3-5 years? Does anyone have any success stories about settling their debt? I am just trying to sleep good at night with this decison.TY
To make a long story short, I have managed to bury myself with almost $70,000 in credit card debt I did not want to file bankruptcy. I have been able to pay around $1,500 a month towards credit cards consistently which usually cover a little more than the minimum payment. I was doing the math and even with getting interest lower this is going to take me anywhere around 8-10 years. So I decided to join a debt settlement program that allows me to pay $1075 a month for 36 months and it will get me out of debt by settlement. I have never been late on anything before but this month I have been advised by the company I decided to work with to stop paying the creditors. Does anyone know if the debt settlement companies send pfd’s or are they just trying to settle and get their share? What are somethings that I should expect to happen to my credit in the next 3-5 years? Does anyone have any success stories about settling their debt? I am just trying to sleep good at night with this decison.TY
It’s important to know that a reputable settlement company should not be receiving any portion of the settlement. They should have fees that are built into your monthly payment which are fully disclosed to you prior to enrolling in the program.
Debt settlement is a great solution, but is best suited for someone who is in a financial hardship and can no longer keep up with their minimums or only contribute the minimum on their accounts. Since you were still current, some things you’ll expect to see with your credit are your accounts closing, late payments on your credit report as well as charge offs. This will affect your credit the most during the first couple years in the program and will improve as each account is settled.
It is important to realize, you are structuring a plan to pay off your debts, not maintain or improve your credit rating. It is much quicker and easier to rebuild credit than it is to pay off large amounts of debt, so your first concern should most always be taking care of your debt.
In terms of success stories, I work as a debt counselor for one of the most reputable debt settlement companies at Nationwide Debt Solutions, and I get to see many of the results for our clients. Not saying that this is typical for all settlements, but I have seen $25,000 accounts settled for as little as $5,000! Most are settled in the range of 25%-55%.
Please contact me at mike@ncacreditrepair.com should you have any other questions!