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Relying On Debt Settlement Companies For Credit Card Debt

Author : Brian Oneill

Many people love to have credit cards. However, there are definitely a lot of them who swipe their credit cards without thinking about their capacity to pay on time ending up with debts. Some credit card debts are also caused by a sudden loss of a source of income such as a business and a job. If you are having trouble paying off your credit card debt, one solution is to rely on debt settlement companies.

There are two kinds of debt. First is the secured type of debt that includes housing and auto loans or financing programs. the secured type of debt do not usually reach the stage of settlement for the creditors could always take the house, car or any other promise that the individual made when applying for the loan. The second one is the unsecured type of debt. This type includes credit card debts, medical bills, personal loans and the like. They are considered as unsecured for the creditors do not have an assurance that they will get something as payment. This is also the type that is usually subject to settlement.

Debt settlement has been a common solution to unpaid credit card debts. It is better than making payments, which include continuously accumulating interests. a certain debt can be settled on your own or with the help of debt settlement companies.

There are some advantages of asking a debt settlement company for help. First, the company will take care of communicating and negotiating with your creditor or collector. This means that you can have more time to find a source of income. Second, you can get a smaller amount to pay.

Most debt settlement companies will ask you to stop paying the creditor or collector and focus on raising the lump sum for the settlement. This will often make the creditor or collector desperate to get any amount that you can give. Most debt settlement can reduce your dues by half . Third, you can simply live a peaceful life while you raise money to pay off your debts. A debt settlement company may negotiate with the creditor or collector and have them stop calling you.

When relying on a debt settlement company for a solution to your credit card debt, you will need to raise a lump sum that the company will present to the creditor or collector. This will help you avoid lawsuits and daily threatening calls. However, most debt settlement companies will request for you to stop paying your creditor or collection agency so your FICO score may go down. Thus, relying on a debt settlement company is suited to people who are more concerned on settling their debts and avoiding lawsuits and bankruptcy than maintaining their credit scores.

At present, going to debt settlement companies is less risky. New laws that were passed by the senate in 2010 protects the consumers against dishonest companies. Some of the features of the laws include lower fees, availability of full refund, and the removal of upfront fees.

Author's Resource Box

Lee is an expert in the area of debt collections. Lee has been through credit card debt settlement and is now debt free, he has written about his entire journey on his blog located at

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Tags:   Debt Settlement, Credit card debt settlement, Debt settlement companies, settling credit card debt, debt settlement laws, credit card sue

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Submitted : 2011-07-25    Word Count : 373    Times Viewed: 433