Debt Negotiation and Impact on FICO Score

[Anonymous]

Am seeking advice from knowledgable people in here. I was contacted by a law firm stating that they can assist with credit card payment problems via debt negotiation.  My FICO score with Experian is 665 right now and we are HEAVILY in credit card debt. Minimum payments are made on time. They propose utilizing the FTC Fair Debt Collection Act, Credit Reporting Act and other legal measures to settle on our debt at about 50% with a payment schedule that would decrease monthly payments by about 55% - a huge debt load relief for us. They said debt could be paid off in 4 years total. They assure us that it would have little to no impact on FICO score and it would show as a disputed item on the credit report. I am seriously contemplating this, but don't want this move to interfere with future planned mortgage refinancing and taking equity out of our house and rental properties. Any advise as to how debt negotiation and settlement affects FICO score and ability to obtain credit in the future? Thank you!

[Anonymous]

most of the negotiations that this company can make you can do on your own w/o paying them a fee.

Sometimes you just gotta tighten up the belt a bit and create a plan. My Dw and I just competed a 1 year plan to pay off over 30K in CC debt. Now we have an additional $1k a month going into savings we never had before.

Min payments will take forever to pay it off- you have to be honest about your situation and brain storm about possible solutions. The are sometimes DRASTIC and sometimes obvious.

[Anonymous]

Well i cant say what would happen, but from my personal experience. I had a overdrawn bank account with wachovia bank. It was reporting since 2005. This past August i called them up and ask for a settlement. They agreed to half the amount. The original amount was 1600, they agree to 800. Once the account was updated on my credit report, it stated settled in full for less than amount. The balance showed as zero, but to my surprise, my credit scores went up a few points. I'm not saying this would happen to you but i look at it like this, its best to have the account settled rather still showing a high balance.