Great question! After all, if you are in debt, you do not have a lot to spend, right? Debt settlement help costs vary by company but in general, they take a percentage based on the amount of debt you have entered into their program. The average settlement fee is typically 15% of your debt amount.
Each company has different ways of collecting the 15% fee (give or take a few percentage points depending on the company you use) of your debt amount. Often times, the cost for your debt settlement help will be built into the monthly payment plan they set up for you while other companies will take the first month or two of your payments as thier fees and after that they take only a small portion of each monthly payment you make.
There are companies that weight their fees according to how much they save you during the negotiations which gives them an incentive to do a good job for you. This can result in you paying them more than the 15% standard. Some people prefer this method over a fixed 15% fee structure because they like their company to have some skin in the game. So it really depends on your preference and comfort level. Any way they slice it, the cost for your debt settlement help should equal somewhere around 15%.
Is it worth it? Well that depends on your situation. If you have $30,000 in credit card debt and cannot seem to make any headway in lowering it with your current income, reducing that amount by 40,50, even 60% will certainly help you get out of debt. If you choose a good debt settlement company who say reduces your $30,000 debt to $15,000 and you end up paying them $4500 in fees to help you, you still saved $10,500 overall and got out of debt in less than 3 years.
…AND you got the support and knowledge you need to make it happen. What is good debt settlement help that can get you out of debt worth to you? Can you get out of your debt without help and a lower monthly payment? If yes, then don’t do it because there are drawbacks to debt settlement. If not, it’s better than bankruptcy.