From Bankrate.com - 3 truths about debt settlement

Writing on Bankrate.com, Steve Bucci answers this question:

"I take home $9,000 per month, but pay $2,500 to my credit cards. I can't continue to pay my credit card bills. I am thinking I might stop paying and try to settle. Will it hurt me that I have gainful employment?"

He says,

"Of course you can pay your credit card bills. You just have to dedicate about $3,000 of your $9,000 of income to debt repayment instead of what you are currently spending it on. With a salary and credit card debt in excess of $100,000, the problem is clearly that your spending is out of control. Whatever the reason for this may be, where there is income, there is hope!"

But, he cautions,

"I don't like to be negative, but I can't imagine a creditor settling your account for less than you owe if you have a source of income that can be garnished and, most likely, assets that can be attached. To be fair, there are a lot of misleading ads running right now that have people erroneously thinking they can just settle debts and walk away scot-free. Some debt settlement companies even say that you have a right to settle debts for less than you owe, like it's a new government entitlement you just need to apply for."

Bucci believes that debt settlement is a bad idea for several reasons. To read what they are, we recommend you read "3 Truths About Debt Settlement"

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