Need Help with Credit Card Negotiation Hook


Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Mar 31, 2007
My step daughter is trying to help a friend get out of about $25K of credit card debt. She is asking me for advice re a company that supposedly renegotiates the debt for a fee. I know there is no free lunch in this world, but I don't have enough experience with this kind of business to show her where the hooks are.

Has anyone out there dealt with this topic that can give me a speedy education?

This is the company in question:
Debt Negotiation & Settlement - What We Offer Clear Debt Solution

Thanks in advance.
My cousins wife ran up a credit card for 30k without him knowing about it. He got a lawyer and tried to get it reduced. After lawyers fees and paying so much on the dollar he did not come out ahead. What would be the defense used to have the balance reduced? Could file bankruptcy, but a debt is a debt..
Consumer Reports:

"A common ploy: taking your money with the promise of paying off bills, then simply pocketing the cash."

"You can check credentials at The Association of Independent Consumer Credit Counseling Agencies ( and the National Foundation for Credit Counseling (, whose members are supposed to adhere to certain standards. Also ask your state attorney general's office or local Better Business Bureau about complaints."
There seems to be a number of these "non profit" outfits in our town competing for the opportunity to bail out any CC debtor that steps up to the plate. I am always skeptical about organizations that propose to help those who have gotten themselves in a financial mess. I guess I think that there must be some other hook that they are fishing on and they think that if these folks are so undisciplined as to get into this mess, that we can earn a little bit more money off of their ignorance.

Maybe I have seen too many scams in my day to be objective on the subject.
I would suggest looking at creditboards....there is info there....but I remember reading that these outfits look bad on your credit report and some dont make their payments to the cc's on time, etc.
Follow up

Thanks for the quick responses. I think I have convinced her that it is a poor idea to try to get someone else to renegotiate credit card debt - just one more vulture on the carcass.

It is really stunning how fast credit card debt increases at these 25% rates. I'm generally not sympathetic to those consumed by CC debt, but it is amazing how quickly the interest and fees overwhelm the original debt. :crazy:
You can generally call up and negotiate directly with the credit card companies. Since it is unsecured debt, they are happy to take pennies on the dollar a lot of times. It almost makes me upset that I save as well as I do, when I could have lived extravagantly only to dump the debt later.

Just make sure to not give them a bank account number unless it is an account with a small amount of money. They will sometimes offer to take a specific amount from a direct transfer, then wipe out your account. Also, do not take money out of a retirement account to pay this debt, as they are not able to take money from retirement accounts even if they file a lawsuit against you!

Those debt negotiation companies are all scams. Stay far far away!
Thanks Olav - good tips.
If you want her to take the do it yourself approach:

0. Don't add anything to the debt. Not a penny.
1. Call all debtors and ask for lower rates. Be polite but firm.
2. If the differences between interest rates are significant, try to transfer as much debt from high interest rates to low interest rates. When doing this, consider any balance transfer fees.
3. Pay the minimums on every card except the one with the highest rate. Pay as much as possible to that card.
4. Minimize living expenses and send extra to the card with the highest rate.
5. Lather, rinse, repeat.

What her friend will likely find is that as she pays down and pays off the debts, her existing credit cards will end up trying to woo her back with better offers, which will just accelerate the process.


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