Debt Elimination Companies

Is it a good idea in using a company such as Debt Solutions to get out of credit card debt?

I was checking on line about getting my credit card debt paid off. Debt Solutions suggest I let them negotiate my debt.

Public Comments

1. No. These debt consolidators charge interest too. In fact, they charge a lot more than you'd wind up paying if you just paid your bills off to begin with. It just seems like less because it's over a longer period of time. It's like trying to pay off debt with more debt. The only way to get out of credit card debt is to stop charging things to the cards. Cut back on any thing extra, no eating out, no fun, nothing. Take all your extra money and apply it to the credit card bills every month, focusing on the ones with the highest interest rate first and working your way to the one with the best interest rate. You can plan out how long it will take you to pay off the cards here: http://cgi.money.cnn.com/tools/debtplanner/debtplanner.jsp After you get your credit cards paid off, you need to save money so that you have an emergency fund and living expenses in case something bad happened.
2. No it is not a good idea to use them. Most of these companies charge you a huge interest on top of what your paying,and a lot of them set up an account for you within there company and once you have paid enough in for them to negotiate a debt, then they go ahead and negotiate with that creditor. In other words - you are paying them money every month,and until you pay them a certain amount they do not do any negotiating.In the meentime while you think they are working on your bills - your bills are actually heading for collections because they arent getting paid. this also goes on your credit report and even though they want you to think it will look good - it actually has a negative impact on your credit rateing. the best bet is to talk with your creditors yourself,and instead of making the minimum payment pay an extra $20 a month towards it so that the bill actaully starts to go down. If your having financial difficulty - call the creditors and talk with them - tell them your having financial difficulty and need to reset your payment schedule and have a new lower rate so that you can actually get the bill paid. If you have a bill thats in collections or not been paid for a few months - call them and tell them you want a settlement offer to clear the account. you can usually get a settlement offer for about 1/2 of what you actually owe
3. All they do is not pay your creditors for months and then try and settle for less. No special skills. No magic. They just don't pay. You can do the same thing. Also, If you hire some company to pay your debts and they don't pay. You, and you alone are still responsible for the debt. Your creditors will sue you and not the company you hired.
4. No way! These are settlement company's. Bad news! they let your accounts fall into collections and then make deals with the collection agency for less then you owe. They charge lots of fees and usually don't tell you that you are responsible to claim the "settled" amount on your taxes! Talk to a credit counselor. I went with Debt Counseling Corporation. I paid my full debt so my score is so great, I just did it at lower interest rates and a much lower payment. I was paying 29.99% on my Chase card and they lowered it to 6%. My credit is great and they taught me a lot about my finances and budget. Sounds cheesy but they really did help! here is their link: http://www.DebtCounselingCorp.org