Common Myths About Debt Relief Settlement Debunked
Have you heard conflicting stories about debt settlement? If so, you're not alone. Many Americans face overwhelming debt yet hesitate to explore debt relief due to misinformation. At Hikaru Services, we often speak with individuals who’ve delayed getting help because of myths and fear.
In this guide, we’ll debunk the most common debt relief settlement myths so you can make informed financial decisions.
If you're struggling with high credit card balances, personal loans, or deceptive financial practices, Hikaru Services and our HS Debt Support division are here to support you with expert legal connections and personalized strategies.
Myth 1: Debt Settlement Is the Same as Bankruptcy
Truth: Debt settlement and bankruptcy are two entirely different solutions.
Debt settlement involves negotiating with creditors to reduce the total amount owed.
Bankruptcy is a legal declaration of inability to pay debts, with more severe and lasting impacts on your credit.
Why This Matters: Debt settlement allows you to pay a portion of what you owe without the long-term damage bankruptcy can cause.
Myth 2: Debt Settlement Will Ruin Your Credit Forever
Truth: While debt settlement can impact your credit score initially, the effect is not permanent.
Credit scores often decline when accounts are reported as “settled for less than the full amount,” but most clients see improvement over time—especially if the alternative is default or bankruptcy.
Credit Score Recovery Timeline:
Time Since Settlement
Average Credit Score Impact
0-6 months
Drop of 60–100 points
6-12 months
Gradual improvement begins
1-2 years
Steady recovery
2+ years
Often higher than pre-debt
Myth 3: Debt Settlement Is a Scam
Truth: Debt settlement is a legitimate financial strategy when done through a trusted provider like Hikaru Services.
Unfortunately, scams do exist. That’s why it's essential to work with professionals who:
Provide full transparency
Connect you with licensed consumer protection law firms
Follow compliance guidelines under FDCPA and Credit Card Act of 2009
We offer real legal support—not just automated promises.
Myth 4: You Must Pay Your Debts in Full No Matter What
Truth: Creditors are often willing to negotiate, especially when accounts are delinquent.
Credit card companies and lenders understand that getting something is better than nothing. This is the basis of settlement agreements. You can save thousands and avoid legal consequences.
Myth 5: Only Irresponsible People Use Debt Relief
Truth: Life happens. Medical bills, job loss, inflation, or emergencies can hit anyone.
According to the Federal Reserve, over 35% of U.S. adults carry credit card debt month-to-month. Many of these individuals are hardworking, responsible citizens who’ve experienced setbacks beyond their control.
Myth 6: Debt Settlement Companies Can Guarantee Results
Truth: No ethical company can guarantee outcomes.
While we use strong consumer protection laws and experienced negotiators, the outcome of any settlement depends on creditor cooperation and client eligibility.
At Hikaru Services, we always:
Explain all risks and potential outcomes
Avoid false guarantees
Provide legal connections to advocate for your rights
Myth 7: You’ll Be Harassed Even If You Use a Debt Settlement Plan
Truth: Once you work with legal professionals, harassment often stops.
Consumer laws like the FDCPA (Fair Debt Collection Practices Act) protect you from unfair collection practices. Our partners leverage these laws to ensure creditors communicate through proper channels only.
If you’re experiencing collection harassment, speak with us to get connected to law firms that know how to stop it legally.
Myth 8: Debt Relief Settlement Doesn’t Work
Truth: Thousands of people have successfully used debt settlement to reclaim their financial health.
Here’s a look at success stories from a nationwide survey:
Debt Type
Average Settlement Reduction
Timeline (Months)
Credit Cards
40%
24
Personal Loans
35%
18
Medical Debt
50%
12
With guidance from Hikaru Services and our HS Debt Support division, you can join the growing number of people finding real, legal relief.
Myth 9: You Can’t Save While in a Debt Relief Plan
Truth: In fact, most debt settlement plans are designed to help you save money.
When your monthly payments are reduced through settlement, many clients are able to:
Rebuild emergency savings
Pay off other bills
Reduce reliance on credit
Our tailored plans empower you to stabilize your finances for the long haul.
Myth 10: Debt Settlement Affects Employment Opportunities
Truth: Most employers don’t check credit scores unless the job involves sensitive financial roles.
Even when a credit check is done, a settled account is far less damaging than an account in default or collections.
Taking control of your debt demonstrates responsibility and maturity—qualities employer's respect.
Final Thoughts: Knowledge Is Power
There’s no shame in needing help. What matters is acting based on facts—not fear or stigma. At Hikaru Services, our HS Debt Support division is committed to clearing the path with truth, empathy, and professional guidance.
We help individuals manage and reduce unsecured debt through a proven legal process and partnerships with experienced consumer law firms.
Ready to take the next step toward financial relief?
Contact us today and let’s discuss your personalized options.
Frequently Asked Questions
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No, debt settlement typically applies to unsecured debts like credit cards and personal loans. Secured debts like mortgages are not covered.
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Most programs last between 12 and 36 months depending on your debt amount and negotiation timeline.
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Yes, but regulations vary. That’s why it’s crucial to work with providers who understand both federal and state laws.
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Fees vary, but ethical providers charge based on performance—after a settlement is reached, not upfront.
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Yes, but our affiliated law firms can provide defense and legal representation as needed.
