3 Reasons You Should Never Hire a Debt Relief Company for Large Credit Card Balances

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While both have their place, there is a third “hidden” option that savvy consumers are using to save thousands: DIY Debt Negotiation.

If you are carrying significant debt, here is why the “professional” route might actually set you back:

1. The “Fee” Problem Debt settlement companies don’t work for free. They typically charge a percentage of the enrolled debt. If you settle $25k for $12k, you might think you saved $13k—but after the company takes their $5,000 fee, your “real” savings shrink significantly.

2. The Communication Gap When you hire a firm, they often tell you to stop talking to your creditors. This “radio silence” can lead to lawsuits. When you handle it yourself, you maintain a line of communication, showing “good faith,” which often leads to better settlement percentages.

3. The Tax Implications Many people don’t realize that forgiven debt over $600 can be considered taxable income. A DIY approach allows you to work at your own pace and properly document your financial situation—such as “insolvency”—to potentially minimize the tax hit. For example, if your liabilities exceed your assets, you may not owe the IRS a dime on that forgiven $13,000.

Take the Power Back Settling your own debt isn’t about “tricking” banks; it’s about a business negotiation. Banks would rather take 40% of what you owe than 0% in a bankruptcy filing.

If you’re ready to stop paying fees and start paying off your debt, resources like SettleSmart.net provide the exact templates, scripts, and 10-phase systems used by the pros.

Stop being a “client” and start being your own advocate.