Debt Negotiators Saugerties NY

By Tamara E. Holmes • Bankrate.com

If you're saddled with thousands of dollars in credit card debt, the lure of someone promising to cut your debt in half could be strong. But debt negotiators -- companies that try to persuade your creditors to forgive some of your debt -- may be more of a hindrance than a help to your credit situation in the long run.

Debt negotiators contact creditors for consumers and try to work out a payment plan that those consumers can afford. They also go to bat for consumers who are financially unable to repay a debt, and in some cases convince the creditors to take what they can get and forgive the rest.

But while losing part of your debt load might sound appealing, it might not be the best move.

"Steer away from debt negotiators," says Nick Jacobs, director of public relations for the National Foundation for Credit Counseling . One reason: Debt negotiators don't work for free, Jacobs says. Negotiators have various ways to determine their fees. Some charge an upfront cost. Others charge a percentage of your total debt while others charge based on the amount they are able to get creditors to forgive.

Any way you look at it, the money you give the debt negotiator could be money used to pay down debt. Not only that, but it's important to do the math. If a debt negotiator gets creditors to forgive 15 percent of your debt and the negotiator wants 10 percent for his work, you might have been better off applying the 10 percent.

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