Do You Need Debt Settlement Advice? Read These Tips Before You Sign Up! - By: KD Bickell

Just a few short years ago, debt settlement was a little-known strategy for paying off your credit bills. Only those people who really needed serious help even considered debt settlement.

Thinking of bankruptcy? Behind on your credit card payments?

Then you were a perfect candidate for debt settlement. But now, those companies offering the service make it sound easy to get out of debt by paying 40-50% of what you owe.

Unfortunately, many people bought into this dream without realizing how debt settlement really works. With the new credit card rules, these companies are required to be more upfront in how they promote their services, and can't charge the high fees before providing any service. So that will help you avoid the most common problems with this option.

But there are still a few things you need to know, so here is some advice on debt settlement you must read before you sign up:

You MUST be behind in your payments.
Most consumers don't realize this, and many of the companies you see in the ads don't tell you this. But think about it this way – if you are paying on time, and the credit card companies are getting money from you, WHY would they allow you to pay off your debt for less than you owe? The truth is that they won't. So if you are not already behind in your payments, you need to stop paying to gain enough leverage for settlement to work.

Your credit WILL be damaged.
If you are already behind in your payments, this is no big deal, as your credit is already damaged (both by you late payments and your large amount of debt). But for the average consumer with good credit, by stopping your payments and paying less than you charged on your cards, this will hurt your credit quite a bit. Of course, for many people getting out of debt is more important than "good credit" but at least you need to know this ahead of time.

You MUST have a lump sum of money to pay off your settlement offers.
The credit card companies won't take payment plans – that's the arrangement you already had! If they are going to take less than what you owe them, they want it all at once. Makes perfect sense. So if you don't have enough money saved up, you'll need to start saving or find a way to borrow the money you need to pay the settlement amount.

So all of these tips are standard when it comes to settling your debts. The more you know about credit card debt settlement, the more likely you are to have success using this strategy!

About the Author

Need more debt settlement advice? Check out these tips from author (and former debt settlement client) Kris Bickell so you don't get scammed by an unethical debt settlement program.

Article Directory Source: http://www.articlerich.com/profile/KD-Bickell/46229

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