Once you decide that debt settlement is the best route for handling your debts, you then have the task of deciding whether you should hire a debt settlement company or if you should do it yourself. As with many financial decisions, there are pros and cons to both options.
Hiring a Debt Settlement Service
The biggest advantage probably of hiring a debt settlement service, assuming you choose an experienced and reputable service, is that you have a company working for you who knows what they’re doing. Since they’ve probably worked with numerous customers and creditors, they’ve likely developed some techniques that help them successfully settle debts for less money. This is experience you don’t have unless you’ve settled debts before.
A hard part about hiring a settlement service is that you have to find a reputable service. There are debt settlement companies who take their customer’s money without doing much debt settling. These companies have given debt settlement a bad reputation. Not all companies are bad like that though. You probably have to take the time to find the good ones.
You’ll also have to pay a fee for using a debt settlement company. Of course, if you settle debt yourself, you pay no fee to a debt settlement company.
Doing It Yourself
The biggest reason probably to settle debt on your own is to save money. The money you spend paying a debt settlement company could be used toward a settlement offer, which would in turn probably help you get out of debt sooner. For example, a debt settlement company could charge you anywhere from $50 to $3,000 or depending on how much your debt is settled for. You could use that money towards the settlement amount for a debt instead of paying it to a company.
If you settle debts on your own, then you probably lower the risk of being scammed out of your money. Though there are newly amended federal laws for debt settlement companies, these laws primarily apply to for-profit companies who sell their services only over the phone. Most other debt settlement companies are not subject to these laws. That means, these companies can charge you fees upfront and they don’t have to tell you about the potential drawbacks of debt settlement without violating the recently amended federal Telemarketing Sales Rule. The last thing you want to do is probably pay a bunch of money into a debt settlement program and walk away a year later without your money and without any settled debts.
Which Do You Choose?
If you have a reputable company in mind, you have to decide whether it’s worth it to pay the fees for their experience and time and let them attempt to settle on your behalf or if you’d rather save that money and try to do the work on your own.