As a collection agency owner these guys are ALL scams. You can negotiate directly with either the original creditor or the collection agency and settle the accounts without being charged to do so.
In the last year or so most of the banks and debt buyers have significantly reduced their "blanket settlement" amount. I've even seen a major credit card issuer do a 25% settlement when the account was in "bucket 6" ~ which means the account is 6 months delinquent and just about ready to charge-off. That was a 1-off situation and I haven't heard of it happening recently but wouldn't be surprised if they do it again because the delinquency #'s are so bad nowadays.
If your account is directly with the issuer, you can normally get a 50% settlement. With a primary collection agency (first agency to work the account), you can get a settlement of 60%. A secondary agency can generally get 50% and a tertiary agency generally get 40%. The caveat here is that ever bank and debt buyer has it's own requirements, and the %'s I've quoted are probably on the high side.
Where you can really score with settlements is that many banks and debt buyers have now started an "aggregate settlement", whereby an agency has to "average" a certain settlement percentage - what that means is for every 30% settlement they take they have to get a 70% settlement to keep their average at 50% (if they are a secondary shop). If you are going to try and settle it's best to go in at 30% and hold tight to your guns with it and hope to hell they have an aggregate policy.
Now, as for not screwing up your credit ... that's not going to happen. Anytime you settle an account it will mess up your credit. If you're current then the best thing to do is to put your cards in your dresser and forget they are there and just use cash everywhere you go. Pay off the cards as soon as you can and try to break the cycle. It's vicisious.
In the last year or so most of the banks and debt buyers have significantly reduced their "blanket settlement" amount. I've even seen a major credit card issuer do a 25% settlement when the account was in "bucket 6" ~ which means the account is 6 months delinquent and just about ready to charge-off. That was a 1-off situation and I haven't heard of it happening recently but wouldn't be surprised if they do it again because the delinquency #'s are so bad nowadays.
If your account is directly with the issuer, you can normally get a 50% settlement. With a primary collection agency (first agency to work the account), you can get a settlement of 60%. A secondary agency can generally get 50% and a tertiary agency generally get 40%. The caveat here is that ever bank and debt buyer has it's own requirements, and the %'s I've quoted are probably on the high side.
Where you can really score with settlements is that many banks and debt buyers have now started an "aggregate settlement", whereby an agency has to "average" a certain settlement percentage - what that means is for every 30% settlement they take they have to get a 70% settlement to keep their average at 50% (if they are a secondary shop). If you are going to try and settle it's best to go in at 30% and hold tight to your guns with it and hope to hell they have an aggregate policy.
Now, as for not screwing up your credit ... that's not going to happen. Anytime you settle an account it will mess up your credit. If you're current then the best thing to do is to put your cards in your dresser and forget they are there and just use cash everywhere you go. Pay off the cards as soon as you can and try to break the cycle. It's vicisious.
creditboards.com
Tons of info there and a good forum for credit/debt settlement info.
The services for the most part are scams, there are some legit..but no guarantees and in my opin some are unrealistic in what they expect you to cut and do (ie selling a newer car and buying a piece of shit) very hard to do in this market..
If its all unsecured debt (credit cards), depending on the circumstances it is not hard to get 30-60% reductions in extreme cases (job loss, medical emergencies and extended time off). Mortgage is more difficult to get reworked...car loan in my experience they will rarely move on (unless your rate is 15% or you dealt with a buy here - pay here kinda place where late payments are priced in).
Tons of info there and a good forum for credit/debt settlement info.
The services for the most part are scams, there are some legit..but no guarantees and in my opin some are unrealistic in what they expect you to cut and do (ie selling a newer car and buying a piece of shit) very hard to do in this market..
If its all unsecured debt (credit cards), depending on the circumstances it is not hard to get 30-60% reductions in extreme cases (job loss, medical emergencies and extended time off). Mortgage is more difficult to get reworked...car loan in my experience they will rarely move on (unless your rate is 15% or you dealt with a buy here - pay here kinda place where late payments are priced in).
