1. 8 Myths About Settling Credit Card Debt The offer of settling your credit card debt can be very tempting. When you’re dealing with a substantial amount of debt, this is especially true. However, not every person struggling with debt is best served by settlement. Here are eight common misconceptions and myths about settlement, as well as the truth you need to know about credit card debt relief: Myth 1: You Can Get Your Debt Slashed for Any Reason There are many reasons why a credit card debt relief agency may choose to help you reduce your debt load. However, not every reason is a legitimate one - or one that will lead to you getting the help you’re looking for. In general, debt relief agencies are looking to help people who are experiencing legitimate hardships. This may include medical issues and resulting debts, divorce, loss of employment, or other major concerns. Simply not want to pay your debt down despite adequate resources to do so is not considered a legitimate hardship. Myth 2: It Costs Money to Get Out of Debt You don’t have to pay someone to help you get out of debt. It is perfectly legal - and sometimes advisable - to negotiate your debts with creditors yourself. While this may save you money, it isn’t always effective. If you find that you aren’t having success negotiating on your own, consider partnering with a professional. Myth 3: That Money is Due Upfront and Out of Your Control If you do pay for help with debt settlement, debt relief agencies are no longer legally allowed to accept fees upfront. As of October 2010, they are required to reduce your debt first. Myth 4: It Won’t Cost Much to Settle My Debt This myth is sometimes true, but often not. Most debt relief agencies require payment on a percentage basis calculated from the total amount of your debt. That means that those with larger debt loads will owe more - sometimes a substantial amount.

2. Myth 5: Debt Settlement Won’t Impact My Credit Score This simply isn’t true. Debt settlement can impact your credit score as much as a bankruptcy or other major event. However, this only happens once the event is reported, so expect a delay in that impact. Myth 6: Deciding Not to Settle Means the Debt Remains Forever There is a statute of limitations when it comes to collecting on debt. Laws vary from state to state and by circumstance, but in general, if a debtor has not paid on an account for long enough, it is no longer enforceable for collection. Myth 7: After Negotiations End, Debtors are Free of Debt It is important to remember that not all debts are eligible for discharge or settlement. This may include unpaid taxes, alimony and child support, and some types of student loan debt. Talk to your financial expert to learn more about what debt you might be left with after settlement. Myth 8: Bankruptcy or Settlement Are My Only Options There are always options for handling your debts. If you are experiencing a crisis like a divorce or job loss, for example, you may be able to negotiate forbearance. This will give you time to get your finances in order so that you can pay down your debts on a time table that works for you. If this leaves you with any questions, be sure to address them with a financial and legal expert. They can help you navigate the settlement process and get the best possible results.