If you exceed your credit limit, additional fees and charges may apply. ![]() And if you stop making payments on a credit card, late fees and interest will be added to the debt each month. This can have a negative effect on your credit score and may result in the creditor or debt collector filing a lawsuit while you are collecting settlement funds. Most debt settlement companies will ask you to stop paying your debts in order to get creditors to negotiate and to collect the funds required for a settlement. Warning: Debt settlement may well leave you deeper in debt than you were when you started. Using debt settlement services can have a negative impact on your credit scores and your ability to get credit in the future.Unless the debt settlement company settles all or most of your debts, the built up penalties and fees on the unsettled debts may wipe out any savings the debt settlement company achieves on the debts it settles.Working with a debt settlement company may lead to a creditor filing a debt collection lawsuit against you.You may be charged fees for using this account. If you do business with a debt settlement company, the company may tell you to put money in a dedicated bank account, which will be managed by a third party.In many cases, the debt settlement company will be unable to settle all of your debts.Some of your creditors may refuse to work with the company you choose.If you stop paying your bills, you will usually incur late fees, penalty interest and other charges, and creditors will likely step up their collection efforts against you. Debt settlement companies typically encourage you to stop paying your credit card bills.Debt settlement companies often charge expensive fees.Before agreeing to work with a debt settlement company, there are risks that you should consider: Consider all of your options, including working with a nonprofit credit counselor, and negotiating directly with the creditor or debt collector yourself. ![]() Debt settlement companies, also sometimes called "debt relief" or "debt adjusting" companies, often claim they can negotiate with your creditors to reduce the amount you owe.
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