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Misconceptions of Settling Credit Card Debt

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Unfortunately, there are a lot of misunderstandings out there when it comes to settling credit card debt. If you are struggling to make payments and looking for a viable solution for debt relief, then it may be beneficial to start by separating the facts from the myths. Keep reading to review common misconceptions of settling credit card debt to ensure proper elimination of your debts.

Settling Debt Means Hiring a Debt Negotiation Company

Many people have come to believe that the process of settling debt requires you to hire a debt negotiation company. While such a company can be helpful when attempting to negotiate reduced rates with creditors, the truth is that they are far from necessary. Rather, you can attempt debt negotiations on your own simply by calling your creditors and asking for reduced rates. If you are a shrewd negotiator and show patience, then you may be able to save money on service fees associated with counseling agencies. That being said, the insider knowledge and experience offered by professional debt negotiators is often worth the cost.

Debt Settlement Guarantees Reduced Credit Card Bills

While many credit card customers do achieve reduced payment plans, this is not always the case. In fact, the large influx of people experiencing high levels of debt has resulted in slightly reduced chances for successful negotiation. Still, it is estimated that the average debt negotiation results in an estimated 50 percent reduction in debts owed on an account. Your likelihood for successful debt negotiation improves based on factors such as length of time you have been carrying the debt, amount of total debt and level of candidacy for bankruptcy.

Debt Settlement Gets You Out of Debt Immediately

Depending on the specifics of your debt settlement, you may or may not achieve immediate debt elimination. Settling credit card debt can be done in a number of ways. Popular options include a reduced payment plan and reduced balance on receipt of an upfront lump sum. If you agree to pay a lump sum to the creditor, then this likely will absolve you of all debt owed on that credit card. If not, then you likely have just negotiated reduced monthly fees, which must be paid until the negotiated total of your bill has been paid off.

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