There is a lot of debt in the country right now and I am a firm believer in doing what it takes to get rid of it. But I am also a firm believer in doing your due diligence. In other words, research your options and know what you are getting into before making financial decisions. There are a lot of debt settlement companies advertising their services at the current time. We are living in a time where the needs of people make it ripe for these companies to easily entice people in debt to use their services.

Debt negotiation companies are the ones advertising that they can get you out of debt for 50% of what you actually owe. They are not to be confused with credit counseling companies where your interest rates are reduced significantly, but you do pay your balances in full. In the case of debt settlement, your balances are reduced through a negotiation process with the lender. There is no guarantee on the amount of the reduction, but many lenders will reduce the balance by 30%-60%.

Settling your debts will affect your credit negatively and you will have to pay taxes on the forgiven amount. But if you are at the point where you are considering bankruptcy, you may want to use debt settlement as a debt relief option. If you are going to settle your debts, take the time to negotiate them on your own without the help of a service. Services can be expensive and some people say that they can get you better reduction than you can on your own, but I am not sure that is the case. Debt settlement services are not legal in all states.

Lenders will not settle debts that are current. But if there has not been payment in several months and they think there is no chance they will be paid, they will often be willing to negotiate an amount that is less than what is owed to settle the debt. You may have to talk to your lender several times before they agree to settle. Be patient and do not give up. Get all of the terms in writing. Be prepared to make your payment at the time the agreement is made. Make sure get a proof of payment and a release of debt. Keep these documents in a safe place. There may be a time I in the future when you will need these items.

Author Bio: Marjorie is an author that enjoys writing about health and finance. You can visit her latest publication at free Viagra Professional credit card debt relief. Also, find information on how to get out of debt.

Category: Finance
Keywords: free credit card debt relief