How do those companies that promise to eliminate most of your debt work? What's the catch?

I have about 15k dollars in credit card debt and I%26#039;m looking to knock it out. I heard some radio ad stating that they can eliminate a good portion of my debt. How can they claim this and what do they do that gets your debt down? Does this harm your credit score?

How do those companies that promise to eliminate most of your debt work? What%26#039;s the catch?
They can%26#039;t and don%26#039;t buy it. They can eliminate some or all of your debt, but all they do is file bankrupcty for you which is turn can screw you up for 10 years.Example


Chapter 7:


You file bankruptcy on January 10, 2003 and receive a discharge on May 30, 2003. The bankruptcy remains on your credit report until May 2013. (10 years)


Chapter 11:


You file bankruptcy on January 10, 2003. You receive confirmation of your chapter 11 plan on March 15, 2003. The bankruptcy remains on your credit report until March 2013. (10 years)


Chapter 12 and 13:


The court normally grants the discharge as soon as practicable after you complete all payments under your repayment plan (typically 3-5 years).











Avoid credit repair agencies that charge a fee to improve your FICO score by removing negative, but accurate, information from your credit reports. No one can force credit reporting agencies or lenders to remove accurate information from a credit report. Credit repair companies often take your money without delivering what they promise, or provide only temporary improvements of your score, sometimes by removing accurate information that will reappear later.
Reply:If you are actually current on your cards then don%26#039;t even think about it. Keep your credit good -- those tricks are for people who%26#039;ve already harmed their credit history by being delinquent.





You might try debt consolidation (which does not lower debt but might lower total payments), or get a parent to make you an authorized user on a lower interest rate card, and transfer balances, etc.
Reply:I agree with the previous answer about checking things out. However, the main way that they work for you at %26quot;getting rid of debt%26quot; is that usually, people who are very far behind on their credit cards owe a lot of interest and fees. Just think about compounding interest on your apr rate, especially if it%26#039;s a default rate. It doesn%26#039;t take very long to increase the balance due if you don%26#039;t pay the interest (at least) monthly. So when you are in default, most of what you owe consists of interest. The debt %26quot;assistance%26quot; (and I use that term VERY loosely) negotiate a different amount to be paid by getting the credit card companies to waive portions of the interest, late fees and penalties.