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Watch this clip above to find out whether debt settlement companies are able to hold their promises of settling their clients’ credit card debt with the creditors at the lowest possible amount.

Here’s how debt settlement companies prey on desperate credit card creditors:

Debt relief companies often tell their clients to stop paying their bills. Instead, the customer is instructed to pay a certain amount each month into a separate bank account set up by the company. They promise that once there’s enough money in the account, they will negotiate “lump sum” settlements with creditors. During this time, of course, the interest charges and penalty fees keep piling up on those unpaid accounts.

Source: via MSNBC.com

“The debt settlement field is filled with scam artists who charge huge upfront fees and then fail to settle any debts.” – Liz Pulliam Weston, the author of “Your Credit Score: Your Money and What’s at Stake“

If you’ve encountered such companies that offering such debt settlement solutions – avoid it because it’s a scam!

According to Los Angeles Times, Weston says “The debt settlement field is filled with scam artists who charge huge upfront fees and then fail to settle any debts.” In fact, many debt settlement companies are getting bad press in the media after many of their clients filed complaints against them. It is because many ended up paying off more credit card debt than usual – refer to debt settlement scams.

Here’s some Weston’s advice when are struggling to pay off your huge credit card debt load:

1. Make an appointment with a legitimate credit counselor

Firstly, you have to allow a legitimate credit counselor to review your current financial situation to find out whether you’re eligible for a debt management plan – a five-year-plus low-interest rate plan that enables you to pay off your credit card debt on a regular basis. Weston suggested that you should find a counselor who is affiliated with the National Foundation for Credit Counseling – start finding a credit counseling now here.

2. Make an appointment with a bankruptcy attorney – when bankruptcy is your last resort

When there’s no other way to solve your credit card debt problems, you have to consult a bankrupt attorney to see whether filing for bankruptcy is the best option to eliminate your debt or a ideal way to avoid being sued by the creditors.

3. Start seeking reputable settlement companies when credit counseling and bankruptcy are not your best options

If both credit counseling and bankruptcy don’t really suit you – you can refer to a bankruptcy attorney for some recommendations of legitimate debt settlement companies that may be able to help you paying off debt effectively.

If both of you are authorized users, you and your spouse have equal legal responsibility to clear off the outstanding balances. Hence, there is a need for you and your spouse to communicate and solve the problems together. You are reminded not to ignore the debt because your credit score will be badly affected.

Once you and your spouse have decided to divide the debt equally and both of you have informed your creditor about the arrangement, what must you do next? In general, the creditor will divide the debt and place it into 2 new individual credit accounts, one on your spouse’s name and one on your name. You should pay off as much debt as possible and dig yourself out of debt as soon as possible.

Sometimes, life is full of uncertainties and challenges. Your life becomes more difficult when you are currently jobless. Being an unemployed, how do you pay off your credit card debt?

Here are some possible financial solutions you can take:

Option 1: Obtain friendly loan

You can look for financial support from your family members, your relatives or your friends. When you are facing financial hardship, it will be ideal if you can obtain friendly loan from someone you know because you may not be required to pay for interest. At the same time, you will have a more flexible repayment term. You don’t need to worry so much if you can’t find a job within a short period.

Option 2: Negotiate with your creditor

You may consider settling your debt with your card provider on your own. Write in a settlement letter by explaining your current financial situation and propose to settle your debt at a reduced amount. You can do so if you have some fund in your saving account.

Option 3: Sell off some valuable items to raise cash

Settling debt may affect your credit rating. In order to prevent this, you can consider selling off your jewelries, electronic equipments, luxurious items, car, etc to raise cash. Utilize the cash to pay off your outstanding balance.

Option 4: Utilize your tax refund

Being an unemployed, you may be entitled for tax refund. You are suggested to make good use of your tax refund to pay back your credit card debt.

Option 5: Get personal loan

Since you are currently unemployed, obtaining a new loan seems to be a bit difficult unless you own fixed assets. If you have a house, you may get a low interest secured loan by using your house as collateral.

For more info about getting a personal loan for people with bad credit – here.

Seriously speaking, being a divorcee and an unemployed can be very stressful and depressing. But you need to be positive. It is not a big deal. Worse comes to worst, you can file bankruptcy in order to become debt free. Turn into a new leaf and rebuild your finances with the right strategy.

It’s hard to expect when such unfortunate event would happen on you and there are few circumstances that you don’t have to take responsible for your spouse’s debt:

• Certainly, if the card is under your spouse’s name and the debt is owed by your spouse
• If you or your spouse are a second cardholder on the account who has charging privileges and the account is not a joint account

On the other hand, the surviving partner is fully responsible for the credit card debt with these circumstances:

• If you or your spouse are a second cardholder on a joint account – in that case, you have the bear your spouse’s responsibility to pay off card debt because your name is listed in the credit report
• You’re likely to take full responsibility for your spouse’s debt if you reside in community-property state. However, these rules vary by state. Therefore, you have to consult your lawyer for more details about common property law in your state.

Since you have to bear your spouse’s responsibilities to pay off your debt – what should you do? Follow the 5 steps to below:

1. Inform all creditors that the account holder has passed away

You have to send a copy of the death certificate and other related documents including the account number to the credit card companies. Keep a copy the letter for your future reference and remember to send the original copy via certified mail as a proof that the mail has been delivered to the right recipient.

2. If your spouse has savings or assets – use it to pay off debt

If your spouse has cash savings or any valuable assets, you have to pay off the total outstanding debt with it. If you’ve any questions about making payment with your spouse’s assets, you can refer to the executor.

3. Be firm and don’t simply answer all calls from the debt collectors

Answering relentless debt collection calls might the most difficult part to handle. You need to succumb to such pressuring calls from the debt collectors for a short period of time. If it’s regarding paying off debt with your spouse’s assets – always remember to clarify all doubts with the executor. Don’t simply answer all questions that you’re not familiar with.

4. Make sure the debt does not exceed the statute of limitations

Most people would get rid of their debt legally without paying a single cent if their debt has passed the statute of limitations. In that case, if the debt collectors asking for a debt payment which the debt has passed the statute of limitations – get a lawyer to help you get out of debt that you’re not responsible for.

5. Settle debt with the creditors on behalf of your spouse

If your spouse doesn’t have any assets, you have to act fast to negotiate with the creditors for settlements. In this case, you can make a settlement offer and make the best offer that you can. Once you’ve reached to an agreement, make sure it’s done in writing before you start making payment.