Overwhelmed by credit card bills but hesitant about debt settlement? In 2025, with FTC warnings on risks and CFPB updates on protections, knowing if it’s your fit could save thousands—or steer you to safer alternatives. This self-assessment guide arms you with steps to decide confidently, based on expert insights.
Debt settlement involves negotiating to pay less than owed, often 30-50%, via lump sums.nerdwallet.com Ideal for unsecured debts like cards, it’s not for everyone—FTC notes risks like credit damage and lawsuits.consumer.ftc.gov For NYC residents facing high costs, settlement can resolve in 24-48 months, but self-assess first.
Georgiou Law, PLLC, founded by Efstathios Georgiou, offers free assessments, using his ex-banker expertise to tailor plans.
Self-Assessment Steps for 2025:
- Evaluate Debt Type and Amount: Settlement suits unsecured debts over $10,000; not secured like mortgages.nerdwallet.com Calculate: If unsecured debt equals half your income, consider it.nerdwallet.com
- Assess Repayment Feasibility: Can’t repay in five years despite cuts? Settlement may help, but stop payments risk fees.consumer.ftc.gov
- Check Savings Ability: Can you save $200-500 monthly for escrow? Programs require this; dropout rates high if not.consumer.ftc.gov
- Weigh Credit and Tax Impacts: Expect score drop; forgiven debt taxable.consumer.ftc.gov If needing credit soon, opt for management plans.nerdwallet.com
- Review Alternatives: DIY budgeting, consolidation loans, or bankruptcy? Chapter 7 erases debts quickly but lingers 10 years.nerdwallet.com
Benefits if Suitable:
- Savings on principal.
- Faster freedom than minimums.nerdwallet.com
Risks:
- Lawsuits, collections.
- Tax hits; scams.consumer.ftc.gov
Tips:
- Use CFPB worksheets.
- Verify companies via state AG.consumer.ftc.gov
Contact Georgiou Law for guidance.
