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Dear Scott – Due to medical issues my financial situation has become rather dire. I have 2 credit cards which hold the majority of my credit balance of approx 83,000 dollars. If I could get the companies to settle immediately and at a percentage of 35 to 40 – I could get at the funds..what are my chances and what kind of business vehicle could achieve this without charging me 15% for a short term negotiation? Thanks – D

Your question is a valid one and one that I hear often, namely, can I avoid paying fees to a professional debt settlement company? The short answer is yes, it is possible, however I liken it to doing your own taxes, be prepared to dedicate many hours of time, effort, and quite frankly….frustration!

Your ability to negotiate your own debt will hinge on your ability to find the right people to speak with at your financial institution – the ones with the authority to make such a decision. As you likely know (or can imagine), often the big banks that issue most of the credit cards in this country can be a bear to deal with as you may get caught up in a maze of customer service reps and phone trees (press 1 for X, 2 for y, etc.). Just like doing your taxes, many people hire a professional debt settlement company because it’s just faster and easier.

In addition, remember that no matter who negotiates your credit card debt, you or a professional company, there are no guarantees the results you seek will be achieved. You mention a reduction of 35-40% on the dollar and that’s pretty steep, doable…but steep. The question becomes who has a better chance at achieving such results, you or an experienced company that may settle millions per month and has established relationships with each of the creditors? Food for thought.

There’s never any harm to trying it yourself before using a professional company and using them as a fallback plan if you find it too daunting. And remember that due to the “new” FTC debt settlement laws, the 15% (or whatever fee is charged) can only be charged AFTER the company has successfully completed a negotiation for you. It’s pure pay for performance.

Thanks for the question. Good Luck!