Should You Use a Debt Settlement Service?

If you have troubles dealing with all your debts, then debt settlment could be a solution.

But be aware: dealing with debt settlement services can be risky. You should think well about it and consider all of your options, including working with a nonprofit credit counselor.


About Debt Settlment Companies

Debt settlement companies are going to help you negotiate with your creditors to reduce the amount you owe.

However, before hiring a debt settlement service, you should remember:

  • debt settlement companies often have expensive fees;
  • debt settlement companies typically suggest you to stop paying your credit card bills. Hence, if you stop paying your bills, you will have late fees, penalty interest and other charges;
  • using debt settlement services can negatively impact your credit score and your ability to get credit in the future.


Some Tips to Help You Decide

Before choosing if you are going to use a debt settlement company and which one you are going to use, you should remember the following.

Avoid working with a debt settlement company which promises to settle your debt if they:

  • ask for any charges/fees before settling your debts;
  • guarantee 100% they will erase your debt;
  • order to stop talking with your creditors;
  • inform you they will stop debt collection calls or lawsuits;
  • guarantee all your unsecured debts can be paid off.


Alternative Solution to Debt Settlement Companies

An alternative to a debt settlement company is a non-profit, consumer credit counseling service.

They are non-profit and they will help you deal with your creditors in order to manage your debt and develop a plan to cancel your debts. Something that you can afford and that can help get you out of debt.

They can also help you creating a budget, providing other financial counseling.

In alternative, you may want to consider consulting a bankruptcy attorney, who will be able to provide you with your options under the law. Some bankruptcy attorneys will give you a free consultation.

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