Several debt settlement and debt management companies will tell you to stop paying your creditors. The reason behind is that most of the creditors will only be willing to negotiate on a lower payment when the account has been late for a long time. When a creditor is ready to charge off an account it means that he has lost expectation to recover money on that credit account. He may be willing to sell the account of to a collection agency at that point. Usually it takes at least six months for a creditor to charge off a credit account.
Having an account that has deliberately been made late from 30 to 180 days can result in a lot of negative information on your credit report. Having accounts reported as late as delinquent results in a record on your edit reports that stays there for seven years.
This can do some serious damage to your credit rating. You should only stop in your creditor directly once you’re assured of the fact that the payments are being made by a debt management company directly. There should be no the time between when you stop making payments and the debt management company takes over.