If I hire a credit card settler to settle my credit card debt will I stiil be eligible to have credit from those creditors and will my credit score improve. Is it a positive or negative to even do this.
by 
Lorianne
ANSWERS: 4
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Going into a program where a third party negotiates credit settlements for you and manages payments is almost as bad on your credit score as filing bankruptcy. Creditors will be extremely hesitant to offer you credit again. If you settle your accounts for less than the total balance, the creditor will issue you a 1099-C tax form. The government considers the amount written off as income and you owe taxes on it. Beware.
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I think you should figure out some way to pay off your debt - it IS your debt. That said, I would stay away from "Debt Consolidators". Your creditor(s) will likely prevent further use of your card - certainly while you are on a payment plan - and most likely permanently. If you're late on a payment, your score will decrease regardless of who negotiates a reduced payment or a reduction in amount of debt owed. The latter (reduction in amount owed) will ONLY be acceptable to the creditor if you already late (usually 60-90 days) and you have 50-60% of the full amount owed, and you can pay that amount immediately. There is NOTHING a Debt Consolidator can do that you can't do yourself and they aren't cheap. They prey on people who are afraid and feel guilty.
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Paying it off yourself should be 1st goal. But that being said, yu can negotiate on your own and not pay someone else to do it (you have to have the stomach for this though - it is not easy). Eventually your credit score will improve if you do not run up more debt after you settle cause once you do you will receive a flood of "offers" by more people hoping to help get you in debt again. You will have to pay income tax on the amount forgiven.
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Very good answers here. Do not involve a third party. You will need to pay for their services also (another debt). Call the credit card companies and neogiate a payment plan with them. They may settle for something rather than nothing. People who say they will settle it for you is a scam.
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