Should I use a debt settlement company or negotiate directly with my creditors?

Debt settlement companies can offer services that individual consumers cannot and are often useful when the amount of debt owed is overwhelming and difficult to manage on their own. However, in the state of Washington, there are laws in place to protect consumers from companies charging exorbitant fees and operating without sufficient regulation. When considering the use of a debt settlement company, it’s important to research the company and ensure it follows state regulations. If a company offers too-good-to-be-true promises, such as guaranteeing a specific amount of debt will be eliminated, it may be a scam. In Washington, all debt settlement companies must be registered with the state and conform to the regulations established by the Department of Financial Institutions. Negotiating directly with creditors can also be beneficial. Consumers should gather all relevant documents and inform their creditors as to why they cannot repay the debt in its entirety. Creditors will generally be amenable to lowering or eliminating the debt in exchange for a one-time payment or making reduced payments over a period of time, depending on the type of debt. Ultimately, each consumer should carefully consider the amount of debt owed, individual circumstances, and assess if they have the necessary skill and confidence to negotiate with creditors. While debt settlement companies can offer helpful services, they can also be costly and a consumer should be sure to find a reliable and reputable company that adheres to state regulations.

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Should I use a debt settlement company or negotiate directly with my creditors?

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