If you are near or at the point of default/charge-off, then you don't need to hire any 3rd party company to settle debts...you can negotiate on your own. Please note that they only settle on accounts that are way past due...they won't settle on current accounts.
-----------------------------------------
Stay away from any "debt consolidation" company that promises to cut your debt and payments in half through debt settlement....This is a risky tactic of deliberately ceasing all payments to creditors and forcing your accounts into default to attempt settlements. You pay a monthly fee to a debt consolidator....this entire fee goes towards building a settlement account and to the consolidator's fees to “settle” your accounts in the future. Your credit card companies will deliberately not be paid so that all the accounts will default/charge-off so that they can attempt settlements at around 50%. If you are current on your accounts, this process will ruin your credit rating for sure. Debt settlement is like a roll off the dice with your finances...You can never predict how your creditors will respond to the deliberate defaulting of your accounts...they might settle at 50%...or they might serve you a summons, take you to court...and if they win, you could be looking at wage garnishment.
Many people who sign up with “debt consolidation” firms incorrectly assume that they have the power to force your creditors to accept settlements...they don’t. Your creditors have the right to refuse settlements and take you to court.
======================
If you settle on your own....Offer 35% and go from there. - Get all terms of any settlement deal you reach with debt collectors IN WRITING BEFORE you give them your money. This letter should state the settlement amount and that the account will be “paid in full” upon receipt of this amount from you. Keep the letter in a safe place. Never accept settlement deals over the phone that are not backed up in written terms. If you don’t, the debt collectors will deny that any settlement was ever made once they get your “settlement” money and will come back demanding more money from you.
