Credit Card Debt Settlement – Using an Agency or Not?

There are valid reasons for using a debt settlement agency when you need help with your credit card debt. Some of us like to deal with our money problems on our own – but others feel overwhelmed and need somewhere to turn for help.

Money is an emotional issue and our attitude toward money and being in debt can keep us from taking steps to help ourselves. The professional advice and intervention of a good agency counselor can ease your mind and help bring payments down to a level you can afford.

You may visit an agency just for a consultation and advice on how to best handle a debt problem or may choose to use the full services some agencies provide.

The rapid rise of credit card debt and resulting financial problems it causes have placed a heavy burden on many people in this shaky economy.

Unfortunately, it has also given rise to many agencies that are less than helpful. Some of these are outright scams and can leave you worse off than you were before using them.

Avoid Scams by Looking For…

To avoid scams, look for credentials that can be verified or ask your friends for a recommendation if they have had good help with their own money problems.

There are also non-profit agencies that are supported by local businesses and by local or state governments. These may be a good choice but only if they provide the level of service you need.

With your research completed and a choice made of which agency to use, be totally honest with the representative. This is the time to be open about your finances, your debt load and your ability to pay.

No one can help you your debt if you are not willing to help yourself. If you hide anything from the counselor you are hurting your own chances to eliminate your debt problems.

When information is withheld it is often due to embarrassment on the part of the debtor. Understand that the employees at the debt settlement agency have heard it all. No matter how bad you think your situation is, they have seen someone with problems greater than yours.

Some agencies will negotiate with the companies that you owe money to and be able to reduce your payment or perhaps arrange for you to pay off less than you owe in some cases. The agency makes the arrangements for you but it’s up to you to make the payments on your accounts after that.

Consolidate Your Cards Into One Payment

Other agencies will consolidate your cards into one payment that you will make to the settlement agency.

They send each of your creditors the amount agreed on from that payment. If this is the service you choose, you need to investigate the settlement company very carefully.

There are some excellent, helpful agencies but you must be able to trust that they are sending payments to your creditors after you have delivered your monthly payment to their office.

Debt settlement agencies are best reserved for those with serious debt problems. Their main goal is to solve your credit debt which means that you need to be prepared to surrender your credit cards.

One of the first things you will be told is that to pay off your debt is only possible if you stop creating new debt. In other words, debt relief is only possible if you stop creating new debt and adjust your attitude toward your economic situation.