Negotiate a Debt Settlement

What you guys think about debt Settlement/Negotiation Programs?

I have like 40K credit card bills and want an easy and quick way out of them. I also need to keep my credit in a good shape so i am looking for a program to work with to help me to get red of debts. I interviewed a few debt settlement companies ( http://www.cydebt.com/home/homepage.shtm) and they told me that they can reduce my debts to 15K and wouldn't mark my credit. So what is the disadvantage of these companies and why everybody thinks that they're rip off. I also can't understand one part... what's will my creditors do if i don't make any payment?

Public Comments

1. they told me that they can reduce my debts to 15K and wouldn't mark my credit. ------------------------- Total lie......A credit card company is not going to give any current (on time) customer a settlement....Debt settlement firms get you to the point to negotiate a settlement with creditors by deliberately letting your current accounts lapse by multiple months...to put you into a position to negotiate settlements. This will WRECK your credit....and you'll get tons of "nice" phone calls from collectors.
2. First off, there is no quick and easy way to get out of debt. If there was, we would all be debt free! Settlement/Negotiations can be a good solution or alternative to people facing bankruptcy. The only way to be offered a settlement, is if the account is seriously deliquent, been closed and is in the last stages of collections. However, doing so definitely affects your credit ratings. You might want to try and negotiate a better interest rate, or look at taking a consolidation loan, this doesnt get you out of debt, but may signifigantly lower your monthly payments as well as the interest rate.
3. You have many issues here. You ultimately are responsible for what has been created and you will be responsible for any settlements made. People that have low credit scores are often those that ignore what is there or fail to respond. Everyone likes to get paid, creditors included. You must be careful when searching out credit fixing companies, etc. as Congress has passed legislation that they must be licensed. If you settle a debt for "less than full balance" that will likely show up on your report, but it's much better than judgements or collections. Always remember that an attorney experienced in these matters will be your best friend. You must take action to resolve everything. Once it's finished, re-establish credit through secured accounts or whatever. In the credit world it's the recent stuff that counts the most.
4. There is no magic bullet to clear one of their debts. If an agency states they can reduce your debt, then all it means is that they will get your creditors to settle for less, charge you a big fee, and it will wreck your credit history for a long time. Avoid credit repair agencies that charge a fee to improve your FICO score by removing negative, but accurate, information from your credit reports. No one can force credit reporting agencies or lenders to remove accurate information from a credit report. Credit repair companies often take your money without delivering what they promise, or provide only temporary improvements of your score, sometimes by removing accurate information that will reappear later. Now on the other hand, a credit counselor can help you to avoid going into default and is some cases there is no fee. They will research your situation and advise you on what is best. Here is a link to organizations recognized as being legitimate and approved by the FTC and Bankruptcy Courts. http://www.usdoj.gov/ust/eo/bapcpa/ccde/cc_approved.htm Govt approved credit counseling agencies. Hope this helps you out.
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