Should You Use Debt Settlement or Do It Yourself?

Posted on 31. Jul, 2013 by in Wealth Essentials

Negotiate debt

If you are struggling with credit card debt, debt settlement may be an option for you. While there are a lot of services available to help you with this, it is something you can try to negotiate on your own. While either option will get you the same results, it may be easier for some people to pick one option over the other.

Why use a debt settlement service?

A debt settlement service will be your advocate while you try to negotiate a lower payment or interest rate, basically they play hard-ball so you don’t have to. Additionally, you may be able to consolidate your debts when you use a third-party to help you settle your debt. This will make it much easier to pay your bills each month because you will only have to worry about one bill. There will be no more forgetting to make a payment or wondering which payment to make first.

Why go it alone?

A third-party is not going to offer you debt relief services for free in all cases. Therefore, it may be easier to put the money you would have spent in your bank account instead. If you are going to go it alone, you will need to be patient and display perseverance because your creditors may not agree to a settlement agreement on your first attempt.

What to look for if you use a debt relief service

It can be difficult finding reliable debt settlement services, but you can see what options there are by way of numerous credit repair companies. If you are going to use a third-party debt relief service, you are going to want to look for an organisation that has your best interests in mind. Always schedule a consultation appointment before you decide to take any settlement or enrol in any sort of credit card debt relief program. You have to make sure that you are working with a partner that will be there for you at all times.

What You Will Need If You Decide To Attempt A Settlement On Your Own

For those who wish to settle their debt on their own, you will need the following things:

  • Copy of your credit card statements
  • Reason for settlement such as a job loss
  • Witness who can verify what occurred during the phone call

All of these aspects are necessary because you need to verify your debt, give the credit card company incentive to agree to your settlement offer, and a witness will make it hard for the credit card company to deny any promises that were made. Keep in mind that you should also make requests in writing to establish a paper trail. If the credit card company agrees to your settlement request, you should have the terms of the settlement on paper.

Other Issues to Consider When Making a Decision

Those who are shy may want to use a credit card debt settlement service because they will no longer have to deal with their creditors. This can make it easier to focus on paying down a large debt when you don’t have people constantly harassing you about it. Anyone who claims a job loss or medical emergency as a reason why they cannot pay the full amount of their credit card debt should have documents that verify that claim. In addition, the settlement amount should be paid in full as soon as possible.

Overall, either choice will get you closer to your goal of paying down your credit card debt. You just need to take stock of which decision is going to be more beneficial to you; additional financial benefit, or additional support benefit. If you don’t mind talking to your creditors, going it alone is the best choice. However, if you don’t like conflict, a third-party service may be the right choice for you.

Do you have more debt than you would like?

Image by Stephen Poff

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