If you’ve found yourself in debt, there are a few different options that you can utilize to work on getting yourself out of debt. One option is that you can negotiate debt settlement with your creditor. Now, you might have heard of companies who do the settlement for you. However, you must be extremely cautious with these companies, as many are scams. Even those that aren’t scams are still dangerous. They often charge substantial fees and tell you to stop paying your creditors and pay them instead. During this process, the settlement company is mainly collecting their fees; not paying off your debt. Also, these companies are also rather unsuccessful in saving you money.
As of November 2009, one company no longer works with debt settlement companies. Chase made a decision to no longer have contact with these companies, as they essentially just take money from debtors who could otherwise be working to pay off their debt by themselves. If you are a Chase customer, there are still options for you to negotiate debt settlement. You can work with Chase yourself and explain to them your situation and work out a settlement or some other form of agreement.
A practice that Chase approves of is using a debt management program to work on your debt. This would involve budgeting assistance, financial education, and counseling to help your situation. Debtors who utilize debt management programs often see benefits such as lower interest rates and reduced payments, so it is certainly something to consider.
The concept of Chase no longer working with debt settlement companies should be a model for other creditors. It is actually a smart decision, since debt settlement companies usually work with creditors to settle for a smaller amount of what the debtor they’re representing owes. Then, they keep fees to keep their company running. If a creditor doesn’t work with these companies, then they have the opportunity to get a larger portion of the debtor’s money, even if they agree to a settled amount or lower interest rates.