Confusing Debt "Settlement" with Debt "Management"
When it comes to debt, one grave mistake is falling victim to an aggressive "debt settlement" firm that claims it can get you out of debt in the blink of an eye, risk-free. If it sounds too good to be true - it probably is. Know this: Debt settlement companies work with your creditors to "settle" your debt for, say, 50 cents on the dollar and while it's a quick fix, this arrangement will ultimately hurt your credit score. Instead, seek the help of a "debt management" program like one from the NFCC or Money Management International, which work with your creditors to reduce your monthly payments. The goal is to repay 100% of your debt and usually takes two to four years to complete, for $10 to $15 a month. Sometimes fees will be waived for extreme hardship.