I Want to Avoid Bankruptcy and Debt Settlement Companies Tell Me They Can Do That

“Dear Steve,

I have a credit card debt to the point were I cannot afford the minimum payments on most of my credit cards. The interest charges are also increasing the balances exponentially. I was approached by many credit card debt settlement companies. I tried a few to see if they could help me reduce my credit card debt and make a one lower montlhy payment.

I got the answer from one of them very fast. The company offered a monthly amount that seems too good to be true, I researched more about the company and came accross your site.

You recommend bankruptcy as an alternative. I really wanted to avoid that. Which option is worse?

I do not understand is how one lower payment will take care of all the much higher payments I have to make every month. Or in fact it is not?

Would the monthly payment be in fact for the debt settlement company for their services?

And if my credit cards do not get settled, then I still have the credit card debt and lose that monthly payment? Would this be the case?

I am really confused now.

Thank you for your help,



Dear Confused,

You can eliminate your debt for 10% of what you owe. Just because that claim is made does not mean it is either true or a benefit most get. Additionally, it is not a program that your creditors participate in and agree to if they don’t want to.

Companies make wild claims that are unsupported and when asked to provide the proof, they don’t and won’t. Yet the Federal Trade Commission has been very clear in the Telemarketing Sales Rules about what is fair advertising that is not deceptive. In those rule the FTC says companies need to be open and honest about their overall success rates.

I would recommend that anyone considering using such a company should read the following fee guides.

  1. The Ultimate Consumer Guide to Checking Out a Debt Relief Company Before You Sign On the Line
  2. 10 Must Do Steps to Find the Best Credit Counseling or Debt Settlement Company for You
  3. How to Check Out a Business or Company to Avoid Getting Scammed or Ripped Off

The underlying problem with the sales pitch you’ve received is there is a broken agreement path here. You have a legal agreement with your credit card companies to repay your debt as agreed. If you enter into a legal agreement with the debt settlement company to receive debt settlement services that is an agreement between you and the debt settlement company. There is NO agreement between the debt settlement company and your creditors the creditors will comply with the claims made by the debt settlement company.

The debt settlement company has no power of law to forge the creditors to modify or reduce your debt. The only debt relief entity that has such power is a bankruptcy attorney.

If you are unable to afford the minimum payments and need a reduction in the debt you owe, only bankruptcy will reduce your debt, help you avoid being sued, prevent a wage garnishment or judgment and eliminate your debt with no potential tax liability.

If you examine the facts, you will find that bankruptcy simply provides greater protection and achieves the result in the shortest period of time and costs significantly less that most debt settlement programs.

You say you want to avoid bankruptcy, but why? Bankruptcy does not prevent you for getting a job, having great credit again, buying a house or car, or just about anything else. So why are you against bankruptcy?

I would suggest you get the facts about bankruptcy first before you rush to make an emotional decision about bankruptcy.

You can click here to find a local bankruptcy attorney and talk to them for free about your specific situation. Get the facts and then you can make an informed and educated decision if bankruptcy is right for you.

I’d suggest you first read How to Get Out of Debt. The Honest and Unvarnished Truth and The Truth About The Success Rates, Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy. They will give you a great overview of what we need to deal with to get you moving in the right direction.

Then use the free How to Get Out of Debt Calculator to review your options.

Once you’ve identified a company you want to work with, then follow my step-by-step guide on what you should look for and expect from a good debt relief company.

Please post your responses and follow-up messages to me on this in the comments section below.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
Damon Day - Pro Debt Coach

Steve Rhode
See also  For Two Years I've Been Contemplating Bankruptcy

1 thought on “I Want to Avoid Bankruptcy and Debt Settlement Companies Tell Me They Can Do That”

  1. Debt Settlement sales people love to talk about low monthly payments, much the same way a car sales person loves to talk about your new low payment, not the actual overall cost of the car.

    The truth is, debt settlement has nothing to do with monthly payments, and the sales person is basically making up a number that sounds good. Settlement is about raising the money and settling the debt as quickly as possible, not dragging it out with low monthly payments just waiting to get sued by your creditors.

    Most debt settlement companies are a rip off, plain and simple. The objective of the free consultation is to sell you something that sounds good, not help you figure out the best way to solve your problem.


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