Foreclosure and Loan Modification Blog

DIY Debt Settlement, Dangers You Should Be Aware Of

[fa icon="clock-o"] Tuesday, April 21, 2015 [fa icon="user"] Jake Sterling [fa icon="folder-open'] debt collections harassment, debt settlement, credit cards

If you have high credit card debt, you might be able to settle the debt for less than the full amount. If you plan to do-it-yourself there are dangers you should be aware of.

Credit card settlement involves negotiating with the creditor company via an offer to settle the amount you owe with a lesser amount. In the event that the creditor accepts, you must be prepared to pay the entire negotiated settlement amount up front, in one lump sum.

Dangers to Credit Card Debt Settlement


You Stop Making Payments to Have Enough to Offer a Settlement and Your Credit Card Company:

  • Can Sue You in Collections;
  • Can File a Court Judgment Against You; and
  • Can Garnishes Your Wages and Bank Accounts.

​Keep in mind that even if you notify the creditor of your intent to settle, legally the creditor does not have to stop from trying to collect payments from you. If that wasn't bad enough, on a daily basis be prepared to receive multiple calls from bill collectors. The more emotionally upset you are, the quicker you will send a payment is the collectors debt-collector-telemarketermain goal. Compound that with your multiple phone calls you surely are going to have to make e.g. discovery of whom you should be speaking with, negotiating, and counter negotiations. Make sure that you have mentally prepared yourself to maintain stamina as this process could take months, years even. Lastly, know that your creditor may have agents, customer service representatives and/or a lawyer that handles debt negotiations. Hopefully, you are of the few that are not intimidated by legal jargon.

shutterstock_103157384​I Am Unable to Pay My Debts. What Can I Do?: 

  1. Don't Ignore the Debt.
  2. Determine if Your Debt is Temporary or Long-Term.
  3. Calculate How Deeply Are You in Financial Distress.
  4. Determine Which Will Work For You - A Debt Management Program; Debt Consolidation; Credit Card Settlement; Debt Settlement; or Bankruptcy.
  5. Need More Help? Contact us and let our attorneys fight for you.  Call 877.882.5338 or fill our the consultation request below.

Key takeaway, know before you attempt do-it-yourself debt settlement even the Federal Trade Commission warns that lacking legal expertise during debt settlement can have a long-term negative impact on your credit score. For a better, less stressful, more successful debt settlement – hire an attorney.

Schedule My FREE Consultation


Jake Sterling

Written by Jake Sterling

Jake Sterling is Amerihope Alliance Legal Services' Homeowner Liaison. He helps to bring awareness and teach homeowners about foreclosure defense and options to save their homes.

About this Blog

Amerihope Alliance Legal Services is a leading loan modification and foreclosure defense law firm with attorneys licensed in 5 states. We have helped over 7,000 homeowners fight back and keep their homes.

Click to Read Our Super Loan Mod Success Stories

Our goal is to provide valuable information to help homeowners who are trying to obtain a loan modification or to stop foreclosure. You may schedule a free consultation at any time.

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