What are debt settlement/debt relief services?

Debt settlement companies and debt relief companies are companies that say they can renegotiate, settle, or in some way change the terms of a person’s debt to a creditor or debt collector. That includes reducing the balance, interest rates or fees a person owes. You can try to do this yourself by contacting your creditors. Debt settlement and debt relief companies often charge expensive fees.

Tip:

Avoid doing business with any company that promises to settle your debt if the company:

  • Charges any fees before it settles your debts
  • Touts a "new government program" to bail out personal credit card debt
  • Guarantees it can make your debt go away
  • Tells you to stop communicating with your creditors
  • Tells you it can stop all debt collection calls and lawsuits
  • Guarantees that your unsecured debts can be paid off
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