Jean Chatzky
Jean Chatzky
Jean Sherman Chatzkyis an American financial journalist, author and motivational speaker. Chatzky has given personal financial advice on various TV shows. She is the financial editor for NBC's Today Show...
NationalityAmerican
ProfessionJournalist
Date of Birth7 November 1964
CountryUnited States of America
promise multiple
No company can promise an end date, but if you have multiple debts, the first one should be settled within a year.
attorney settlement bankruptcy
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.
long seven individual
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.
hook sometimes settling
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.
thinking multiple
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.
settlement
You really don't need to hire a debt settlement company to negotiate with your creditors.
goal enough settlement
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.
fall helping sometimes
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.
settlement
If you'd asked me a few years ago about debt settlement companies, I probably would have told you to avoid them.
guy easy credit-card
Once the settlement is completed, the credit card company will report it to the credit bureaus, which will then make a notation on your credit report that that account was paid by settlement. That's going to signal to future lenders that you left the last guy hanging. That's why, as with bankruptcy, debt settlement is an extreme option, one you shouldn't take lightly. It's not just an easy, cheap way to eliminate debt.
people sometimes settling
Most people don't know this, but if you settle a debt for less than the amount you owed, you are potentially responsible for taxes on the forgiven debt. Look at it this way: You received goods and services for the full amount of debt, but you're only paying for a portion of it - sometimes less than 50%. Anything more than $600 is generally considered taxable, but the IRS will sometimes waive the tax if you can prove that your assets were less than your liabilities when the debt was settled.
guilty spending-money
You won't be caught off guard and you won't feel guilty, because you'll be spending money that you've allocated for the occasion.
holiday vacation goal
Save for your goals. Take note of what's coming your way - vacations, the holidays, what ever is going to cost you money - and start saving ahead of time so that you have a stash when the time comes.
saving-money
In fact, the bigger the bill, the less likely you are to spend it. If you want to really save money, spend only cash and carry only fifty-dollar bills.