Part One - The Decision to Eliminate Debt

The road to unmanageable debt is a long, windy and often murky journey. In my case, it started with student loans. I finished my undergraduate studies with a little less than $35,000 in debt, out of a total of $150,000 in total education costs. At the time, this seemed like a bargain, and I felt good about the Federal loans that I had taken on, which were discounted at exceptionally low interest rates.

If my debt had ended there, I would have been in good shape. However, this was just the beginning. I finished college without acquiring any unsecured debt, but after college I was flooded with a deluge of credit card offers, which I happily accepted. 10 years after finishing college and accepting my first credit cards, I found myself with more than $80,000 in secured, unsecured, government and tax debt. Whoa.

Last week, after struggling to make the minimum payments on my credit cards and realizing that my balances were not diminishing, my interest rates were sky rocketing, and my credit score was plummeting, I made the decision to negotiate with my debtors and join a debt negotiation service.

Debt negotiation, otherwise known as debt settlement, is a process aimed at getting creditors to agree to accept a reduced amount in a lump sum payment in full settlement of a debt. A debt settlement company acts on the consumer’s behalf in negotiating with creditors and settles each debt one by one. In turn, the creditor agrees to report to the credit bureaus that the consumer no longer owes them anything. For example, a client who owes $10,000 may pay as little as $4,000-$6,000 to settle the debt. Your accounts must be in arrears before the creditors will agree to negotiate.

This calculator helps you determine how much interest you will pay and how long it will take you to pay off your credit card if you make the minimum monthly payments.