Why use a Debt Settlement Program

There are several questions a consumer must ask themselves when faced with overwhelming unsecured credit card debt. One of these questions is "why use a debt settlement company?" Or why not negotiate myself? Or why not seek out other methods? Or why not file bankruptcy.

The answer to the first two questions are a debt settlement company has the means and the experience to negotiate with your lender on your behalf to reduce your outstanding unsecured balances. If you contact the lender yourself, they may be not be willing to work with you or they will make the terms unacceptable for the consumer to agree to or even meet. The other methods are doing nothing and working with a credit counseling company which pays the bills for you on a monthly basis. They do not reduce your debt nor do they normally get the interest rate lower. Bankruptcy is a very serious matter which needs to be addressed with an attorney.

The debt settlement company will establish the dollar amount which needs to be placed in a "trust/escrow" account and will determine how long it will take to reach the first plateau of your goals. This plateau is normally half of your lowest outstanding credit card balance. At that point in time, the debt settlement company will start to negotiate on your behalf. Here is an example:

· Owe $19,000 on 4 credit cards ($3,000,$7,000,1,500, 7.500)
· Currently monthly minimum payments of $2,300
· Divide your debt by 40% for a new outstanding balance of $7,600
· Estimate new monthly payments of $750 (less monthly fees)
· Under new debt settlement plan it will take between 12 to 36 months to payoff

Yes, a debt settlement company does have some drawbacks. However, your financial situation requires some type of action. The consumer needs to investigate all the in's and out's of a debt settlement program and how it will work for them.

If the consumer is committed to using a debt settlement program. Now is the time to call an expert and discuss how they can assist you. A good debt settlement company will explain the entire process with you and a realize timeline for getting out of debt.