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Debt Settlement Companies Can Provide Valuable Assistance Consumers

Created: On November 11, 2008 @ 12:44 pm In

“We choose not to work with debt settlement companies,” said Matt Towson, spokesman for Discover Financial Services, Riverwoods, Ill in an article for [1] InsideARM.com.

Virginia O’Neil, spokesperson for the American Bankers Association (ABA), in the same article was noted as saying “the vast majority of banks do not have formal written procedures in place to deal with debt settlement companies. Settlements reached with the help of intermediary companies are typically the same as settlements reached dealing directly with the consumer”.

It would appear that hiring a debt settlement company, according to Discover Financial and the ABA, would be a waste of money.

For some, that would certainly be the case. For others, hiring a third party debt settlement company may fill a need.


Debt settlement is not a strategy that works for everyone. Many consumers that often regret attempting debt settlement were not good candidates to begin with. The best debt settlement companies can offer an invaluable and free service. They can provide an initial consultation to help you understand if this is something you should pursue or not. Legitimate debt settlement companies will let you know if there is a better solution available to you based on your situation.

Time Commitment

There are many things that consumers can do themselves but choose to hire others for. One of the primary reasons we outsource some aspects of our lives is because we do not have the time to learn how to do something or to take the action necessary.

In the case of debt settlement, you must be available during normal business hours in order to speak and negotiate with your creditors. Not everyone has the ability to make and receive personal calls while at work. Others, even with that ability, prefer not to discuss private matters in a public forum like a cubicle at their office.


One benefit of a reputable debt settlement company is their ability to monitor settlement trends with various creditors. The debt settlement process is a negotiation. A creditor’s first offer may not always be their last or best offer. A debt settlement company can often predict at what point in the process a specific creditor will make an offer, how aggressive the offer will be, and ultimately what the creditor may be willing to settle for. This knowledge, that can only be obtained by monitoring the progress of many settlement cases, can save you thousands of dollars.

New Breed Of Debt Settlement Company

You do have an alternative to doing it alone or hiring a debt settlement company to handle the negotiations. There are a very small number of debt settlement companies that now offer several options to their consumers. You can pay a small fee for a training course on how to settle your own debts along with unlimited phone and email coaching. The cost for these services are often a fraction of what you would typically pay a debt settlement company to do it for you.

If you find that after the training and coaching you still need someone to take over the actual negotiation with your creditors, they are available to do so. The cost of the training and coaching will often be applied to the cost to have them handle the negotiations so you do not end up paying twice. One such company even charges as a percentage of what they save a consumer rather than the industry norm of charging a percentage of the original outstanding debt. This alone can save a consumer over 50% of what they would have traditionally spent.

Not every consumer will benefit from debt settlement and not every debt settlement company will be effective, however, given the right circumstances and the right company, there is definitely a place for third party debt settlement companies. You, as the consumer, must spend the time to do thorough research and evaluation of your options prior to enrolling the help of a debt settlement company.

About the Author:
Chris Rocks is the Regional Director of the [2] National Credit Federation (NCF), a consumer advocacy group that assists small business owners and consumers overcome debt and credit challenges. He can be contacted by visiting his personal site, [3] GoodCreditLiving.com.

Article printed from DebtHelp.com Blog: http://www.debthelp.com/blog

URL to article: http://www.debthelp.com/blog/2008/11/11/debt-settlement-companies-can-provide-valuable-assistance-consumers/

URLs in this post:
[1] InsideARM.com: http://www.insidearm.com/go/arm-news/debt-settlement-companies-largely-ignored-by-banks
[2] National Credit Federation: http://www.nationalcreditlawyers.com
[3] GoodCreditLiving.com: http://www.goodcreditliving.com