If you have debts in collections you may be familiar with the offer letters they sometimes send. You owe $300, they say, but if you’ll pay $258 right now we’ll consider the whole debt settled.

Or perhaps you’ve seen signs that tell you that you can settle your debt for “pennies on the dollar.”

Or maybe you’re just savvy about it. You know settling debts is possible. But is it a good idea?

What’s really going on here?

If a debt is in collections, the original creditor is done with you. They’ve written you off and accepted their hefty tax deduction.

They sold that debt to this company, probably for about $30. Or the company has retained them to see if they can recoup the money, and will pay them a percentage.

Either way, the debt collection company isn’t giving anything up here. Even getting you to pay 60 or 70% of the debt is a hefty win for them.

See also: Can a Collection Agency Send Text Messages?

In general, debt settlement is throwing good money after bad.

If you’ve recently come into some money and are trying to avoid bankruptcy then debt settlement can work. If you can talk all your debts down and then pay them all off, then you’ve successfully closed out all your debts for a little less, and that’s a win.

But most people entertain these offers trying to get one more creditor off their back. They end up paying money they need for groceries, utilities, or emergency to alleviate guilt and to get the phone to stop ringing.

Meanwhile, it doesn’t help your credit score, because your credit report reads, “Debt settled for less than the full amount.” It doesn’t help your overall financial situation, because you still have a stack of past due bills to figure out. And all the other creditors are calling, too.

See also: Debt Collectors: Your Rights and How to Handle These Calls.

If you’ve got debts in collections, you already need to be considering bankruptcy.

Most people wait too long. They make payment after payment to old debts and don’t get anywhere at all.

You can save hundreds, if not thousands, by just putting that money to the side for your bankruptcy filing fee, or to get a lawyer’s help. You also stop lawsuits, reposessions, foreclosures, and all those nasty phone calls.

See also: 5 Signs New York Bankruptcy Could Solve Your Financial Woes

So when someone offers to let you settle, say “thanks, but no thanks.” Contact Simon Haysom, LLC, Attorneys at Law, for a free consultation instead. We’re ready to help you take back control of your financial future.