Should I Trust Non Profit Debt Consolidation Companies? (cont.)
Contributed by Melanie Vannuys
1) Settle with your credit card company to pay an amount less than you owe. Most companies have a program in place that will allow you to pay 50-75% of the balance and call it a day. Your credit report will show the account as "settled." While this isn't the best arrangement to have on your credit report, it's better than delinquent or charged off.
2) In some cases, if you are honest with the credit card company and have a little finesse, you may be able to get them to either wipe the account off of your credit report or turn it into a favorable rating. You can even tell the company that you only have a certain amount of money to pay off your debts and you are only going to settle accounts with companies who will offer a good credit rating.
3) In a last ditch effort - and not one that should be looked at lightly - you can simply not pay your debts. While this is not a good solution, it can sometimes be better than bankruptcy. Yes, your credit will be severely impacted and you will have to deal with harassing phone calls and letters from your creditors. Your creditors may even seek judgment against you, although unlikely. However, the negative accounts will drop off of your credit report in seven years.
Whatever method of debt reduction you choose to take, remember this, if you don't change your spending habits, you'll only wind up in the same situation again.
