One of the first questions a new client will typically ask is, “Will this hurt my credit rating?” The simple answer is “yes, it could,” but there are qualifications (as always). “Most of our clients are behind in their credit card payments when they contact us, so their credit rating is already taking a beating.

Your credit card company will not negotiate if they are still receiving minimum payments—why would they? So a necessary initial step to debt settlement is to stop making your credit card payments. After sixty to ninety days past due, your credit company is ready to talk. To be sure, missing these payments will depress your credit rating on the short term, but you’re after a bigger prize—retiring your credit card debt completely.

By using debt settlement, you can typically retire your credit card debt in three years or less, much, much quicker than if you were to just make your minimum payments. Once credit card debt is cleared, your credit rating rebounds swiftly.

So in the long term, debt settlement will repair your credit rating far more swiftly than if you were to just keep making the payments. It’s a matter of patience and perseverance. (And I recommend credit counseling for all debt settlement candidates, successful or otherwise).

No, not all debt is eligible. Only unsecured debt is open to debt settlement, as opposed to secured debt, which is not. Unsecured debt is debt not attached to property or material products. That is, there is no physical item associated with the debt that can be collateralized. Unsecured debt includes the following:

• Credit Card Debt
• Department Store Credit Cards
• Health Bills
• Local Merchants
• Oil/Gas Credit Cards
• Past Due Rent
• Past Due Utility Bills
• Unsecured Personal Loans

On the other hand, secured debt not eligible for debt settlement includes mortgages, auto loans, and home equity loans.

Yes, by negotiating on your behalf with the credit card companies, a debt settlement professional can, accordingly, reduce the amount of your monthly payment. In fact, when we sit down with a new client one of the first things we discuss is what he is are comfortable paying each month. Of course, it’s usually lower than what they are client is currently paying to his credit card company—that’s the point of debt settlement.

The new monthly payment is paid into an account controlled by you with the purpose of paying down the re-negotiated balance. Part of the payment goes toward the debt settlement professional’s fees. All told, what you owe every month under a debt settlement plan can befar lower than what you’d pay to the credit card company directly, which is payment toward the principal plus hefty interest. Keep in mind that the more that is saved every month, the sooner we can negotiate.

When we meet with a new client, one of the first things we do is develop a clear picture of his or her financial profiles. This includes current debt obligations such as mortgage, car loans, student loans, healthcare bills, and, of course, credit card debt. Running the numbers, we come up with a monthly payment comfortable for the client and that satisfies what we estimate the renegotiated credit card debt to be. Typically we can reduce your debt obligation by 30 to 50 percent, so the savings on your monthly payments should be considerable.

Your monthly payment goes into an account whose balance is essentially offered to incentivize the credit card company to start negotiating with the debt settlement company. It shows your commitment to meeting your debt obligations; consider it a token of good faith.

While it’s impossible to say just how much smaller your monthly payments will be under debt settlement, I can promise that they can reflect asubstantial savings compared to what you were paying and certainly on what you owed on the credit card company’s original terms.

Debt settlement isn’t for everyone. While I feel strongly (and that’s why I’m in this business) it’s a very good option for a certain group, debt settlement is not a one-size-fits-all panacea. In fact, bankruptcy or simple credit counseling might be a better choice for those facing very high amountsonerous debt.

“There are several options available to those facing overwhelming credit card debt,” said Tom Brainerd, VP of Marketing for Greenlight Debt Relief, a leading credit counseling and debt settlement company. “But few are appealing, and fewer still help the consumer while protecting their credit rating.”

Here are the typical options:

• Debt Settlement
• Credit Counseling
• Credit Card Debt Consolidation
• Debt Management Plan
• Bankruptcy
• Do Nothing

Of these, debt settlement might be the most tenable, especially for those with a balance greater than $10,000. Debt settlement sees a professional third party negotiate with the consumer’s credit card company to get them to accept a lesser amount in settlement of the outstanding debt. Not only do consumers pay off their debts faster (typically in three years or less), but they also pay also significantly less than if they were to continue making their monthly minimum payments to the credit card company. It’s a viable alternative to bankruptcy in some cases and saves the consumer a damaged credit rating.

“Unfortunately, too many folks think their only alternative to staggering debt is bankruptcy,” said Brainerd. “This just isn’t the case, especially with debt relief tools such as debt settlement. It’s a matter of dollar and sense.”

Greenlight Debt Relief is a company dedicated to helping consumers achieve debt relief through credit counseling and debt settlement programs.

“As unemployment benefits expire and jobs remain scarce, consumers rely on their credit cards more and more to fill in the gap,” said Tom Brainerd, VP of Marketing for Greenlight Debt Relief, a leading debt settlement company. “And they can quickly fall into seemingly insurmountable debt.”

Once they get back on their feet, consumers can use professional debt settlement to control the damage. By using a debt settlement company, they can reduce their debt by up to 50%. A professional debt settlement company works with the credit card company directly to negotiate down the principal owed by a consumer. This leads to lower monthly payments and protects the consumer’s all important credit rating. Once the negotiated debt is paid off, the debt is considered completely retired.

“Everyone knows these are hard times,” said Brainerd, “but there are much more attractive alternatives to bankruptcy.”

Greenlight Debt Relief is a company dedicated to helping consumers achieve debt relief through credit counseling and debt settlement programs.

“A debt settlement company can have a consumer out from under even large card debt in just three years,” said Tom Brainerd, VP of Marketing for Greenlight Debt Relief, a leading credit counseling and debt settlement company. “Yet consumers remain unaware that are other debt settlement options beside bankruptcy.”

Here’s the process the consumer typically follow with a debt settlement company:

Step 1: Call a debt relief company for a free consultation. A professional consultant will assess the consumer’s financial situation to determine his/her potential for debt reduction.

Step 2: The consumer works with the debt consultant to determine the monthly dollar amount that can be saved towards a negotiated settlement. The amount is typically less than the current minimum payments but needs to be an amount the consumer can afford each month. This money will be put aside in a new account the consumer sets up and controls to go toward paying off the debt (not simply paying credit card interest charges).

Step 3: After the consumer enrolls in a debt settlement program, the creditors will be contacted in an attempt to handle future creditor communications.

Step 4: After the consumer has saved enough money in his/her account to make a reasonable offer, individual negotiating begins with the creditors. The debt settlement company will typically attempt to reduce debts by at least 50% of the current balance.

Step 5: Once the debt settlement company has secured a settlement with a creditor, they notify the consumer via email and/or a phone call to explain what has been negotiated.

Step 6: Once an account has been paid the creditor will make a report to the credit bureaus. This may take a few weeks to a few months depending on the company. On the consumer’s credit report they may see that their account is "settled in full," "settled," "paid," "paid by settlement," or "settled for less than the full amount." No matter how they report it, the consumer no longer owes on this account and the balance is zero.

Greenlight Debt Relief is a company dedicated to helping consumers achieve debt relief through credit counseling and debt settlement programs.

“Few American households, relatively speaking, are free from credit card debt,” said Tom Brainerd, VP of Marketing for Greenlight Debt Relief, a leading credit counseling and debt settlement company. “Many of these have reached a point that the debt levels they have created are beyond their ability to manage. But fewer still know that through credit debt settlement they don’t even have to pay the full balance.”

Credit debt settlement is a perfectly legal tactic where the credit card companies agree to take a lesser amount in settlement of an outstanding debt. Not only do consumers pay off their debts faster, but they also pay also significantly less than if they were to continue their monthly payments from the credit card company. It’s a viable alternative to bankruptcy in some cases and, in the long run, probably saves the consumer a damaged credit rating.

“A good debt settlement company can typically settle the debt in 36 months or less,” said Brainerd. “With a little education and research, consumers can relieve their financial burden without the nightmare of bankruptcy. ”It’s not for everyone,” he adds, “but if you think you have reached a point of considering bankruptcy or other credit solutions, it is certainly worth checking out.”

“Debt settlement is a wise choice for those facing large credit card debt, but choosing the wrong debt settlement company can actually damage the consumer’s credit rating,” said Tom Brainerd, VP of Marketing for Greenlight Debt Relief, a leading debt settlement company.

Brainerd recommends looking out for these warning signs:

• The company promises that the consumer’s unsecured debt can be settled for less than the amount owed. There is no guarantee that any creditor will accept partial payment of a legitimate debt and this should be clearly expressed by the company chosen. 
• The company tells the consumer to stop making payments to or communicating with the creditors. What they are not saying is that if the consumer stops making payments on a credit card account, s/he will incur late fees and interest that will be added to the total amount owed, as well as take hits to the consumer’s credit score. 
• The company claims that creditors never sue debtors for not paying their debts. What they are not revealing is that creditors can and may sue if the outstanding debt is large. 
• The company claims that they can have accurate negative information removed from the consumer’s credit report. It is illegal for any company or person to remove negative information from a credit report that is accurate and timely. It is hard to do in the first place, but if done, it is illegal.