What a Debt Settlement Company Can and Can’t Do For You

When it comes to paying off debt, often times people feel overwhelmed and unsure where to begin. Some may even turn to debt settlement companies while others are intimidated by what they have to offer. Here is what a debt settlement company can and can’t do for you when it comes to paying off your debts:

• They can help you to negotiate your debts. While this may seem attractive at first, this is only an option if you are willing to file for bankruptcy should the negotiation not go in your favor. Essentially what they do is encourage you to stop paying on your debts so they go into delinquency, and then the company tries to negotiate a settlement for a fraction of your debt with the collectors under the guise that they can either settle with you or you will file bankruptcy and they won’t see any of their money.
• They can’t offer you a one-stop-shop fix to all of your debt problems. Debt settlement companies tend to have very high fees for assisting you and outside of those costs, you still need to learn how to manage your money. Even if you should choose to go through a debt settlement agency, you still may want to consider meeting with a financial consultant to talk about your spending habits and work out a realistic budget for yourself in the future. While you may be able to absolve all of your debt through them, it’s the habits that will need to change in order to avoid this situation later on.