Credit Cards

Debt settlement

Debt settlement is the practice of paying a lump sum to settle a debt for less than the full amount. Debt settlement companies offer to negotiate with creditors on your behalf, and a favorite tactic is to withhold payments from creditors to force a deal, a practice that severely damages the credit score of debtors. The Federal Trade Commission issued a rule in 2010 that barred debt settlement companies from charging fees before obtaining results.