Home / Quotes / Quote by Jean Chatzky

Quote by Jean Chatzky

“Debt settlement companies work as a middleman between you and your creditor. If all goes well (and that's a big if), you should be able to settle your debts for cents on the dollar. You'll also pay a fee to the debt settlement company, usually either a percentage of the total debt you have or a percentage of the total amount forgiven.”

Quote by Jean Chatzky

Author

Jean Chatzky is a seasoned financial journalist, born on November 7, 1964. She is known for her in-depth research and insightful views on personal finance, having served as an editor and columnist for several prominent media outlets. more

You May Also Like

“If you'd asked me a few years ago about debt settlement companies, I probably would have told you to avoid them.”

Ifs Years Company Years Ago Debt Settlement Debt Settlement

Author:Jean Chatzky

“The Bankruptcy Reform Act of 2005 made it harder for individuals to file bankruptcy, which is always the last resort. Unfortunately, simultaneously consumers racked up so much debt that counseling companies - which are higher up on my list if you need help managing your debt - are sometimes unable to help. So if you fall into this camp, debt settlement may be something to consider.”

“The debt settlement company will direct you to stop paying your creditor and instead send the money directly to them each month. The company's goal is to demonstrate to your creditor that you don't have the money to pay up - that's your leverage. After a few months, the company will typically go to the creditor and say, "I'm holding X dollars on behalf of your customer. He doesn't have the money to pay you, so you should take this amount as a settlement or you'll end up with nothing." If the creditor wants to get paid badly enough, it will take the money.”

Ifs Want Should Ends Enough Goal Pay Company Months Amount Direct Paid Dollars Debt Customers Behalf Settlement Creditors Each Month Debt Settlement

Author:Jean Chatzky

“You really don't need to hire a debt settlement company to negotiate with your creditors.”

Needs Company Debt Settlement Creditors Debt Settlement

Author:Jean Chatzky

“Unless you have multiple accounts that you need to negotiate and you think the project is just too big to tackle on your own, you're better off just calling your creditors directly.”

Thinking Needs Bigs Calling Projects Accounts Multiple Better Off Creditors

Author:Jean Chatzky

“If you are able to settle, you'll be getting off rather easy. Debt settlement companies can sometimes get you off the hook for a large percentage of your debt - in many cases, up to 50% will be written off.”

Ifs Sometimes Able Easy Company Cases Written Debt Settling Hook Percentages Settlement Debt Settlement

Author:Jean Chatzky

“You settled a debt instead of paying in full will stay on your credit report for as long as the individual accounts are reported, which is typically seven years from the date that the account was settled. Unlike with bankruptcy, there isn't a separate line on your credit report dedicated to debt settlement, so each account settled will be listed as a charge-off.”

Years Long Individual Lines Accounts Seven Credit Debt Reports Dedicated Seven Years Settlement Bankruptcy Debt Settlement

Author:Jean Chatzky

“If you're filing bankruptcy, you will likely want to hire an attorney. But for debt settlement, a company is sufficient, or as I said, you can often do the legwork on your own.”

Ifs Want Said Company Debt Sufficient Attorney Settlement Bankruptcy Filing Debt Settlement

Author:Jean Chatzky

“No company can promise an end date, but if you have multiple debts, the first one should be settled within a year.”

Ifs Should Years Firsts Ends Company Promise Debt Multiple

Author:Jean Chatzky

“You fall a bit behind on a credit card bill, your interest rate soars, your minimum payment rises, and you start falling more and more behind every month. You don't see an end. But you don't want to file bankruptcy either. What you can do - and should do - is negotiate.”

Want Should Ends Fall Bits Interest Can Do Behinds Months Bills Rate Credit Cards Minimum Soar Files Payment Credit Card Bankruptcy Interest Rate

Author:Jean Chatzky