Is it better to settle your debts on your own then hire a debt settlement company?
I had three payday loans worth 0. With intrest they were like 00. After my account went to collections, I kept telling them I am doing everything in my power to pay my loan off. Then when I had the lump sum, two of the companies both agreed to settle my accounts in full for the original amount of the loan, without all the interest and high fees. My one loan was 0 and they settled for 8. Then my other loan was 500 and they settled for 400. The debt settlement company wanted to charge 300 and then 50 bucks amount, so anything extra would be used towards the loan. It seems like it would have cost a lot more to use the payday loan settlement company. All they can do in the end is ask for a lower amount.
Posted January 30th, 2010 in Debt Settlement. Tagged: collections, Debt Settlement, intrest, loan settlement, lump sum, payday loan, payday loans, settlement company.
In general, debt management companies get paid by the credit card companies. Also you are paying a fee to the debt management company. On top of all of this once you agree to a debt management company you will lose all you credit card and have a bad mark on your credit report for 7 years. Your best bet is to call your creditor and negotiated your own lower credit. If they say they will not, threaten them with Bankruptcy. Another approach is to pay the minimums on low interest cards and double up on high to medium interest credit card. Do this until they are paid off and then pay the lower interest rate cards.
Philly Guy
January 30th, 2010 at 11:52 pmWhat a tangled web you weave. Unfortunately, there is no easy way out here. If you go to a debt settlement company, they will do what’s called a "Consumer Proposal" For you. This could result in a lower amount owed to settle your debts, however it will leave a huge ugly mark on your credit history. It could take years before you see that mark disappear, which could prevent you from qualifying for a mortgage, loans, or open any type of credit.
My suggestion would be to get in touch with your financial institution, and see if they can qualify you for a consolidation loan. This will show on your credit history, but you will pay off all of your debtors in full and you will only owe one person – Your bank. It may be worth a try.
January 30th, 2010 at 11:52 pm