Quick Answer: Legitimate debt relief companies exist, but for someone with $15-20,000 in credit card debt and a high-600s credit score who’s current on payments, the safest approach is using the debt snowball method rather than risking credit damage through settlement services.
Question:
Dear Steve,
I have between $15-20,000 in credit card debt. Creditors are NOT harassing me, as I make my payments, but many are minimum. My credit score is in the high 600’s, which isn’t terrible, but could be better. I would love to get out from under the debt. I get MANY letters about reducing my debt, but never know if they are for real.
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Which debt relief service can I turn to that is accredited, real, not a scam????
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G
Answer:
Dear G,
You would not believe how difficult of a question that is. It’s not that there are not plenty of good or great debt relief companies out there, there are. The issue is the underlying issue(s) that led you to get so in debt. Unless you’ve addressed that, your situation, no matter what company you select, may not improve.
I would suggest you look at my get out of debt calculator for an idea how different solutions can address your situation.
But the absolute best way to get out of debt with the least “risk” would be to use the debt snowball approach to pay down your debt using someone you trust, you.
Using this approach will help you to dig out and improve your credit scores. Just keep your three oldest cards open after you pay them off.
Before You Sign Anything: Run any debt relief contract through the free Contract Decoder to spot hidden fees and unfair terms. Check the company’s complaint history with the Scam-O-Meter.
Compare Your Real Options: Most debt relief companies won’t tell you about all your options — especially the ones they can’t profit from. Credit counseling has a 21-27% completion rate. Settlement resolves about 1% of enrolled debts fully. Bankruptcy has a 95% discharge rate — and protects your retirement. Take the Find Your Path quiz for a recommendation based on your actual numbers.
I just answered your question.