Q: I receive 6-10 calls per day from the debt relieve people asking me to contact them so they could either wipe out my credit card debt completely or a least reduce it by more than half.
I'm very much tempted to go for something like that since I'm definitely unable to repay the 10k that I owe. But wouldn't that ruin my credit if I go for it?
Thanks, Anthony.
A: Anthony - Settling debt of only $10,000 is a very bad idea. You're going to trade your credit and save only a few thousand dollars. I don't know anything about your financial situation but $10,000 in credit card debt is about average. I'd suggest that you can knock it out with some belt tightening rather than looking at very damaging options like settlement. Yes, you'd ruin your credit by settling your debts. Also, the companies that are telling you they can wipe it out completely are flat out lying to you and you should report them to the Federal Trade Commission. Tighten up your spending, live below your means for a few years and knock out the debt on your own.
- John Ulzheimer
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John Ulzheimer is a nationally recognized credit expert, president of Consumer Education for Credit.com and contributor to On The Money. Learn more about him at CreditExpertWitness.com.