Does anyone have experience with credit negotiators who advise you to stop paying your creditors for 90 days?

Debt consolidation firms have you deliberately default on your credit cards to settle for less. When you use such a firm, the monthly payment you make is going towards their settlement fees and to build a settlement account. Their fees are taken out first. Your credit cards will not be paid and will go into complete default during this process, which ruins your credit rating. This is deliberate so that they can attempt settlements for 50%.

People signing up with debt settlement firms often have the mistaken impression that their creditors will gladly work with such companies..or that they are obligated to accept settlements. You can never predict how your creditors will respond..they might settle at 50%...or they might serve you a summons, take you to court...and if they win, you could be looking at wage garnishment. If the process fails you can end up in a much worse financial situation.

Here’s an example of what can happen when you use a debt settlement firm:

http://www.ripoffreport.com/credit-debt-services/s...

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If you're overwhelmed with credit card debt and you've exhausted all self help options like slashing expenses to the bone, selling valuables and getting extra work, then there are really only 2 options: Entering a debt management plan through a non profit credit counseling firm like NFCC or filing for Chapter 7. NFCC can negotiate reduced payments and interest but NOT settlements. Referral at: http://www.nfcc.org/ - If this does not work out, the other option is Chapter 7 bankruptcy.

you can ruin your credit yourself, without paying someone to do it for you.

Those companies that promise to lower your payments, reduce your debt, negotiate settlements, etc do nothing that you can't do yourself.

Call your creditors and ask them if there is anything they can do to help you. Some may lower your interest, some won't. Some will close your account, lower the interest to almost nothing and put you on a payment plan. None will settle for less than you owe until are delinquent. Then, they still may not work with you. It's a risk you take.

Meanwhile, your credit will take a dive. However, those delinquent accounts have less impact on your score as they age.

Stay away from companies like this. You would be better off negotiating with your creditors directly than dealing with a company like that who will probably fail to pay them on time after your make the "one easy monthly payment" to them, and you'll end up in bankruptcy anyway. Either work a deal with your creditors directly, cut way back and get it paid off, or if you are in really dire straights just declare bankruptcy now.

You would need written confirmation of this advice. Never heard of anyone giving such advice.

Rather like the man who claimed he was advised to stop paying his mortgage for two months during a reorganization at the bank. Then he started hearing from collection agencies, and when he contacted the bank, they insisted that nobody would ever have advise him to stop paying his mortgage