Times are tough for millions of Americans. The slow economy, fewer jobs and less pay have forced more credit card holders to become delinquent than ever before.
Banks, once unsympathetic to these borrowers have been forced to rethink their strategy due to current economic conditions. Many look to debt settlement as a way to cope with this increased financial pressures. Thousands of debt settlement companies are popping up all over the country ready to seize on this growing industry.
Consider this hypothetical scenario; ABC debt settlement company charges no upfront fees and agrees to settle your debt of $15,000 for approximately 50% of the balance. Keep in mind debt settlement companies rarely guarantee any percentage saved, the company then settles your debt for 30% of the balance owed and they have just earned a 20% commission equal to $3000.00.
For sake of argument let’s assume this company charges no upfront fees, which is also rare. The debt settlement company then proceeds to negotiate your debt for 30% of the original balance, earning the company a 20% commission or $3,000.
Debt settlement companies are often very pricey when it comes to this kind of service as offered, but with a little effort you can learn the skills necessary to negotiate your own debt and potentially save a significant amount of money.
Negotiating for your own debt and actually getting it settled can also gain you enough experience on how the process works, although sometimes one account may vary in situation but the rest of it is the same system work. If you are able to talk with collectors and creditors on the phone or write your own debt settlement letter, it may help save you 50 to 60% off in fees.
The decision to proceed with your own do-it-yourself debt settlement is not an easy one. All your options should be carefully weighed and only then should you elect the one that you feel fits your needs and are most comfortable with. Should you elect to learn how to settle your own debts the savings could be significant.
The bottom line is, given today’s economic conditions and the banks’ willingness to do debt negotiation, you should aim to start at no less than 50% and negotiate down to an even lower percentage of the original balance. If you can do it yourself without the help of debt settlement companies, why not?