Macco Law Group, LLP

Credit card debt settlement and discharge solutions

Credit card debt settlement and discharge solutions

Consumers who have racked up an overwhelming amount of credit card debt, regardless of the reason, may feel that they have minimal options for their situation. However, there are various debt solutions to assist people in such a situation, but it is important to keep in mind that not every option will serve the consumer’s best interests.

A consumer who is experiencing overwhelming credit card debt may reach out to a debt settlement company. Such companies typically make promises to debtors regarding settling their debt for pennies on the dollar, which is often a lump sum payment that they negotiate on an individual’s behalf. However, engaging with such a company may prove risky, as these companies are in the business of making a profit. Some of the issues typically encountered by debtors who hire a debt settlement company include: a lack of financial ability to meet the settlement program demands; the freedom of creditors to not settle with the debt relief company; and negative impact to credit rating as a result of stopping regular payments to creditors while the settlement is being negotiated.

Additionally, some debt relief programs may prove to be a scam. If a company charges fees before settlement, discusses a new government program or makes a guarantee that they are unable to deliver, they are likely attempting to scam consumers. Additional options for debtors aside from debt settlement companies include: engaging directly with creditors; seeking the assistance of a credit counselor; or bankruptcy.

Although bankruptcy may have negative consequences on credit in the short term, it may prove to be the best option for certain debtors. Bankruptcy permits a consumer to keep certain property while engaging in a repayment plan. When the debts are repaid, they are discharged on the consumer’s behalf.

Source:, “Settling Credit Card Debt,” accessed on June 28, 2015