 TITLE: Debt Settlement Myths - You Can Settle Debts On Your Own CONTENT: Uncovering Debt Settlement Myths\n--------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: July 13, 2017_\nIt's too bad these debt settlement myths are still floating around out there, steering people in one wrong direction or another. Don't get caught in that trap. Whether you're considering settling a debt, or already decided against it, do yourself a favor and get the facts first.\n### 1\\. Anyone Can Qualify for Debt Settlement\nThough many people successfully negotiate debt settlements, debt collectors are partial to people who are going through genuine hardships. So unless you have recently lost income, are going through a divorce, are dealing with medical expenses, or the like, your debt settlement options are slim. There is one exception: debt that has been charged off and sold from the original creditor to a collection agency. The older the debt, and the more times it's been sold, the better the deal you should be able to get. Of course, in that case you want to try debt validation first. Plus, if it's old enough, you may have reached the statute of limitations, in which case you are not legally required to pay the debt at all.\n### 2\\. Any Type of Debt Can Be Settled\nDebt settlement is an approach that only works with _unsecured debt_, such as credit cards, medical bills, and student loans. If you're having trouble paying on a _secured debt_, such as a house or car, your creditor simply seizes the property.\n### 3\\. Only a Debt Settlement Company Can Settle a Debt\nThere is nothing a debt settlement company can do that you cannot do for yourself. Period.\n### 4\\. Any Debt Settlement Company Will Do\nIf you do decide to use a debt settlement company, do your homework. While there are legitimate companies out there, many employ shady practices that could end up doing you more harm than good. Check them out first with the Better Business Bureau.\n### 5\\. Debt Settlement Companies Have Special Relationships With Creditors\nCreditors absolutely do not foster special relationships with debt settlement companies. In fact, creditors would much prefer to work with you, a preference you should embrace provided you have done your homework first.\n### 6\\. Only a Professional Can Get Me the Best Deal\nThere is nothing a debt collection company knows that is not public knowledge. Debt settlement requires no special education or certification. Here at Credit Info Center, we have all the information you need to negotiate a debt settlement on your own.\n### 7\\. Working With a Debt Settlement Company Will Protect You From Lawsuits\nJust because you have a debt settlement company negotiating on your behalf, this in no way affects the debt collector's right to sue you.\n### 8\\. Your Money is Safe With a Debt Settlement Company\nOne tactic many debt settlement companies will employ is asking you to stop making your payments to the collector, and to send your payments to the debt settlement company instead. The idea is that once the debt collector sees that you're not going to make your payments, they'll be more open to a settlement. The debt settlement company negotiates a deal, and your money is already in their possession to make good on it (minus, of course, their profit). Unfortunately, the money you \"deposit\" with a debt settlement company is not FDIC insured, as it would be in a bank. In some unfortunate cases, these debt settlement companies go out of business or simply disappear, taking their clients' money with them.\n### 9\\. A Settled Debt Will Automatically Fall Off My Credit Reports\nOne of the biggest mistakes people make when settling debts is failing to negotiate the terms of how the debt will be handled on their credit reports. What you should start out insisting is that, in addition to what you agree to pay, the listing will be removed from your credit report. If for some reason the collector will not agree to this, hold out for it. Every collector will eventually give you what you want. It just might mean waiting it out or talking to someone different. However, if you are on a timeline and need to resolve the debt sooner than later, ask for \"Paid\" status. Second to that should be \"Settled.\" Your last resort (and the collector's preference) is \"Paid Charge-off\" or \"Paid Collection\" or \"Paid was 30-, 60-, or 90-days late.\"\n### 10\\. Settling a Debt Will Improve My Credit Score\nTheoretically, settling a debt should improve your credit. You are, after all, paying a debt collector based on a renegotiation that both parties have agreed to. However, if you do not insist on the listing being removed from your credit report, even a settled debt will continue to drag down your score.\n### 11\\. The Only Alternative to Debt Settlement is Bankruptcy\nIf you're having trouble paying on unsecured loans, let your creditors know what's going on ask them for help in the form of a forbearance. If they agree, this will reduce your monthly payments, or defer them completely, until you can get back on track.\nAnother alternative to debt settlement (as well as bankruptcy) is debt validation. This can prove an extremely effective approach for old debt that has been charged off and sold from the original creditor to a collection agency. Often times, proof of the debt is not transferred from one party to the next. This plays in your favor, as the debt validation process requires proof they can legally collect from you. Minus this proof, you are not obligated to pay and the listing must be removed from your credit report.\n### 12\\. If You Do Not Settle Your Unpaid Debt, It Will Never Go Away\nThough debt collectors will attempt to collect from you as long as they are able, there comes a time when you are no longer legally responsible for it based on the Statue of Limitations in your state.\n### 13\\. You Don't Have the Time or Energy for DIY Debt Settlement\nDebt settlement companies would love you to believe that settling a debt with a collector takes more time and energy than you can muster. This is absolutely not true, as proven every day by people who successfully settle their debts on their own. We have all the debt settlement information and sample letters you will need in our bookstore. END