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From debt settlement to debt consolidation — do you really know the right way to get debt relief?

Many people want to try to resolve their credit card debts and personal loan debts on their own. To be honest, I usually advise against this. A law firm like mine has many years of experience resolving debts and as a result has built relationships with creditors that allow us to get great settlements for our clients.

But if you are insistent on settling your debts on your own, here are the six steps to help you along the way:

Stop using and paying the card you are trying to settle

This is an important first step that’s pretty painful for a lot of consumers to accept. It’s necessary to stop paying the cards because creditors will not negotiate unless you are behind on the debt.

Trust me, they will be happy to continue to accept your minimum payment for the next 20 years. Make sure you stop using all of your credit cards from the bank/creditor you are trying to settle with.

For example, if you have two American Express cards and one you want to settle and the other you are currently using, it is unlikely that the creditors will negotiate with you. Also, do not open any new cards, especially from the same creditors you are trying to negotiate with.

Be patient

Be patient because it will likely take some time before the creditors will be willing to settle with you. Most times it will be anywhere from 60-90 days for the creditors to start to negotiate with you.


Firmly negotiate the terms with your creditor to resolve debt. This may take a few attempts to get them to settle for less than the full balance. Know that many creditors will take a better deal if you agree to the settlement in lump sum, meaning you make one payment to the creditor. If you have a hardship, such as a loss of job or medical issue, make sure to explain that to the creditor to let them know you have a good reason for not being able to pay back the debt. Many times they will agree to a payment schedule in lieu of lump sum, but once again this may be for a larger amount on the lump sum deal.

Get it in writing

Whatever settlement you agree on, make sure you get it in writing along with a schedule of payments. Ask them for a settlement letter mailed and emailed to you with the terms of the settlement. This will include your name, the account number, the current balance, and settled amount, the payment terms (due dates and amounts) as well as who to make the payments to.

Make all the settlement payments on time and as agreed

Many settlements will void if you miss or are late with just one payment. Make sure you make all the payments on time!

Once you have completed the settlement make sure you receive a letter that states that there is a zero balance in the account and it has been closed. Check all three credit reports (Experian, Equifax, Transunion) to make sure that it reflects that the account has been settled and now has a zero balance. Do note that this change can take anywhere from 30-180 days to reflect on your credit report.

Be aware that your account may be sold to a different collections company or may even be sold to a law firm during this process. Settling your debts on your own can be dangerous because there is a likelihood that you may be eventually sued for nonpayment of debt. Always weigh your options, and look into free to low-cost options. Consult with a law firm that concentrates solely on debt resolution. Our initial phone consultations are free, so there is no harm in calling to see what your options are. You may be shocked at how affordable our program is!

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What People Have to Say

I just wanted to thank your entire staff at The Law Offices of Leslie H. Tayne, for helping me get out of debt. If it wasn’t for your firm, I would have never been able to resolve my $13k worth of debt in less than 3 years. Your staff did a great job, I was finally able to buy myself a brand new car without using a cosigner. I can’t tell you again how happy I am. I would recommend your services to anyone.

L.C. Client 2007-2009

I sleep like a baby at night now because of the work that you and your office have done. Rest assured that I will refer anyone I know to your office with conditions that are similarly circumstanced.

R.S. Client 2012-2014

You have been very helpful at first directing me in the right direction when I had no clue how to go about handling everything, I really appreciated all your advice and help and hope we can work something out. Thanks again for all your help and kind words, and patience.

D.M. Client 2009-2012

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