The do it yourself debt settlement option has many benefits. First off, it’s very inexpensive to get started. For example, one of the top do it yourself options out there today is the Dave Ramsey Money Makeover Plan. The total cost of this book is around $20 and is loaded with all kinds of info. On top of that this option also gives you complete control as to how you want to execute your plan.
However their are some big disadvantages to this option as well. First, the buck stops with you. This means if you fail it will all be on your shoulders. On top of that you won’t have someone their to hold your hand through the entire process.
Now lets look at the second option, hiring a professional to negotiate your debt. First, this option is a lot more hands off versus the first option. In fact when you join a debt negotiation company they will usually bundle your debts into one big payment and the negotiation company will handle all the payments to your creditors from their. On top of that they will be able to negotiate a deal with your creditors to lower interest and principle payments in some cases as much as 50%.
Those are some great benefits but their are a few disadvantages as well. When you join a debt negotiation company it could have a severe effect on your credit score. However, if you already have bad credit this may not be such a big deal. Debt negotiation companies have also been know to charge some big fees upfront. On top of that they have been know to charge monthly fees that could total as high as 17% of the total amount of debt that you place in the program. Finally, the last thing you should know is that debt negotiation companies will usually only deal with unsecured debt like credit cards, while secured debts like your home mortgage and car loan will go untouched.