“Is there an honest Debt settlement program? I have been looking at the Freedom Debt Relief program and feel frozen since I hear so many bad things about these programs in general. I have not yet had a late payment, and now have no job, so no money, and cannot make the minimums.” – Vici
Thanks so much for writing. You’re hearing so many bad things about debt settlement programs for a reason. Although there may be a few good ones, most charge thousands in fees and don’t deliver results. Take a look at this story from the front page of the New York Times. The article lays it out, but you should know that these companies will tell you to stop paying your bills, then put the money in an account and once you have a few thousand in there, start negotiating settlements with your creditors. This is a waste of your money for two reasons — first, they’ll take a big chunk of any money you manage to save in fees, and second, you can negotiate those settlements yourself just by picking up the phone. Rather than doing this, I want you to call your credit card companies and tell them what is happening. You lost your job, but as they can see from your history, you are a good customer and you want to pay, you just needs some relief right now because you’re having a HARDSHIP. Use that word. The credit card companies are used to hearing from people like you these days. They will very likely work with you. If you run up against a wall, ask for a supervisor. If you still run up against a wall go to DebtAdvice.org and find a not-for-profit credit counselor to help you. These are the good guys. Not free, but much, much less expensive than debt settlement, and they can help you put together a plan to get back on your feet. You’ll eventually need an income to make it happen, but I know you can do it!