The Pros and Cons of Settling Debt Yourself

It’s possible for a consumer to imitate the methods of professional debt settlement companies and many people report success in negotiating a debt settlement for themselves. Initiation of negotiations can begin by calling the customer service department of the credit card company. In general, the credit card company will only deal with a consumer when the consumer is behind on payments but capable of making a lump sum payment.

The Positives

  • Control – By settling your debt on your own, your forced to take control over the process. If you’re a self starter, this may help motivate you to get the job.
  • Reduced Fees – Debt settlement companies charge a fee for their services. By settling on your own you’ll save money that would otherwise go to paying for debt settlement services.

The Negatives

  • Creditor Policies – Certain creditors will not settle directly with consumers.
  • Inferior Settlement Terms – Consumers may face less advantageous settlement rates on their own, as opposed to debt settlement companies that have relationships with creditors and can often package bulk settlements.
  • Poor Lines of Communication – Consumers may face difficulty getting through to decision makers or long delays in any negotiations or paperwork processing with the creditors.
  • Experience – Every creditor has different processes and procedures in how they determine settlement offers and terms. Not knowing those can leave a consumer in the dark.
  • Lack of Support – Settlement Companies have a Customer service department to assist consumers with any questions or difficulties that arise during their program. This support can be particularly valuable, especially in cases where creditors become aggressive. If an account were to escalate to legal status, a consumer settling on their own would need to seek out a third party for help.
  • The Fine Print – Unfamiliarity of the settlement process can be intimidating and mistakes can be made. You will need to beware of fine print and carefully review any correspondence, proposed settlement or agreement with a creditor.
  • Legalese / Lack of Familiarity – Settlement Agreements should be reviewed very carefully, perhaps by a third party, to make sure that all the terms are those that are agreed upon.
  • Emotional Toll – Settling one’s debt can be an emotionally draining and difficult process

If you think that tackling the debt settlement process on your own is the best decision for you, we want to make sure you’re successful! Please review our guide to settle debts on your own for tips that will help you through the process. Good Luck!