Hi my name is Stephen Bis I have been involved with and working in the credit card debt relief industry for more than ten years now and have been in the financial industry for just about twenty years. The reason for me to write this article is to offer people a better understanding on debt relief programs sometimes referred to as debt settlement or debt negotiation programs. I will give you both the pros and cons of this method of debt relief and what to look for when interviewing a debt relief company to assist you in getting out of credit card debt. Before going any further I want to let you know that this will be a very long article and by the conclusion of it my goal is to have you understand how the process of debt settlement/negotiation works in case you don't already know and I would like you to understand the unscrupulous techniques of organizations on the market that do not truly have your best interest at heart.

To begin with I would like to say up front that the procedure of debt negotiation as a means of consumer credit card debt relief is not for all, some consumers are better qualified for a Chapter 13 bankruptcy and others do not have the correct mentality to go through this process.

First you need to understand what debt negotiation is and how come it works. The goal of a debt negotiation company is to obtain a debt settlement for the client on the current debt balance owed to the creditor. So for example you may owe one of your creditors $10,000 so the goal of the negotiator would be to have you end up paying back say $6,000 or less. The two great benefits of utilizing this process are to save money on what you currently owe your creditors and to save much valuable time. By continuing to just pay the monthly minimum payment with even a moderate interest rate you will be looking at around thirty or more years to finally get out of debt, with a working debt relief program you will be out of debt in what could be three years or less depending on your current income situation.

Now you must realize these are tremendous benefits but as with most things in life there are drawbacks, not everything is perfect and these debt relief programs are no different. First off your creditors will not be willing to accept any type of debt settlement at all if you are current and on time with your monthly minimum payments. They would rather see you stay running on their “credit treadmill” for the next three decades and pay them back well over four times the balance in interest alone. So you must go into default on your payments to place the creditors into a position where they will be willing to negotiate a settlement on your debt. When you finally discontinue paying them the whole situation changes and they will then be willing to speak in terms of working out a settlement for less than what is owed, and usually it is significantly less than what is owed.

Naturally for many consumers the early stages of this process will have an adverse effect on their MyFICO credit rating. For those who have already begun falling past due then the negative effect will be no different than it already has become. It’s quite sad to say but for some consumers this will be the deterring issue that stops them from going through credit card debt settlement making them a slave to their creditors for very realistically what could be the rest of their lives. The good news is that this negative effect does will not be one that cannot be fixed, in fact once the settlements begin getting negotiated your credit rating will begin to repair itself and go back up. The reason for this is over 30% of your credit score according to MyFICO is comprised of how much debt you owe compared to your credit limit. So if you are trapped in a very negative debt situation even if you are still up to date with your payments your score is more than likely not all that high to begin with, and besides when stuck deep in debt your mind should be focused on getting rid of your debt as fast as you humanly can, not on your ability to gain future debts.

When falling into default on your debts you must realize that these collectors are just not going to simply leave you alone, they will be calling to try and collect the debt. For some consumers this is not an issue for them, for others it is, that is why I mentioned in the first paragraph this method of debt relief is not for all and the consumer must be in the correct mind set. From my years of assisting people to get out of debt there is no rhyme or reason to how many calls you will be getting some clients of mine pretty much never get called while others get them on almost a daily basis. Something to keep in mind too is that no company has the legal power to stop all the calling, so any company that insists they can is not being completely truthful.

As you can see like I said earlier there are positive benefits and negative drawbacks, but if you can accept the drawbacks you will be very rapidly on the road to financial freedom and will save a large sum of your income in the process. Now to get to the reason of this writing and why I named this article "debt relief programs are they a scam?".

We in this great nation of America over the last few years have been going through a very negative recession in our usually very strong economy. Thus placing many American families in a compromising position financially, leaving tremendous amounts of people trapped in credit card debt with no visible way out. So understandably this opened up a pretty large market for the debt negotiation/settlement industry. Many fly by night organizations have been starting up all over the country, many of which used to be crooked mortgage brokers who sold people bad loans and helped them get into this bad position to begin with. Now I use the word scam which can take on a few meanings, while yes there are some companies out there that are flat out scams and have no real desire of doing any work for you at all, most of the times that is not the case. Instead a lot of companies simply do not offer people all the facts on how the process of debt negotiation actually works nor do they truly offer them a debt relief program for success, which I will explain shortly.

One typical problem that most consumers have with debt settlement companies is they do not fully tell them about how the procedure is going to work, instead they sugar coat everything and just go on about the tremendous benefits. I have spoken to a slew of people who enrolled with companies and were under the impression that they were going to stay up to date with the payments to their creditors and won’t ever get any calls. So without having to say this becomes a big problem once they start on the program.

Another huge problem a lot of these companies run into is misleading people into the kind of savings they will be achieving on their debts. Some companies will state they can save you 80% of what you owe. Now while they may get settlements that low what their conveniently forgetting to tell you is how much you will be saving after you have A) paid them their fees, and B) paid back the creditors. Reputable debt relief services will tell you what your total savings will be. If you will save around 40-50% of what you owe including their service fees and satisfying the creditors than that is very good. In addition most of these companies will try and guarantee a certain amount of savings, if someone says this to you don’t run but sprint for the hills. NO one in this industry can guarantee a particular amount that is why it is called DEBT NEGOTIATION! They are negotiating to get a settlement for as low as they can get. There is never any set amount, the skill of the negotiator and the situation of the client and the creditor come into play with achieving the best settlements.

The worst companies are the ones who will allow you to pay whatever you can to sign up with their program. These are the worst because they do not really have your best interest in mind and know they are positioning you to fail and not succeed. You must realize to obtain the type of savings I stated above this process should take no longer than three years, preferably two or less. And the bottom line is some consumers realistically cannot get it accomplished in that time frame and should seriously be looking into bankruptcy. What these scandalous debt relief companies will do is put you on a program for 4 or more years and basically accepts whatever payment you can manage with your budget. With the full knowledge you won’t be saving much money and will more than likely drop off the program, all they want if your fees and don’t care if they help you out of not. A forthright debt relief service will thoroughly evaluate your budget with you and make sure this is a program that you can manage, as well as fully disclose to you both the benefits and drawbacks of this debt relief process. And allow you to make your own decision as to whether this is the most sensible debt relief method for your financial situation.

One more extremely effective way to review a company is to ensure they are an accredited with the BBB (Better Business Bureau) and that they are in good standings with very few complaints and preferably an A rating. And if there are any complaints make sure they were resolved to the clients liking.

Like I mentioned above I have been in the debt relief industry for more than a decade now and currently I work for a very effective and reputable company with a great track record and an amazing record and A rating with the Better Business Bureau. My company was founded by an attorney who has thoroughly trained debt negotiators who understand the business inside and out. If you want an honest assessment of your situation to see if this is the right method of consumer debt relief for you and your family than follow the link below and fill out an application and request to speak with me. I will go over in immense detail how this program works and whether you are a qualified candidate. I hope after reading this article you feel more well-informed as to how this process works and what to watch out for when you are interviewing debt relief companies.

Debt Relief Programs