Debt Settlement Pros and Consby Chrys
Debt settlement is best when you:
- Could not make payments for past 3 months
- Cannot repay your outstanding dues
- Do not want your creditors to file lawsuits
- Want to pay back your creditors
- Want to prevent your accounts from being assigned to collection agencies
Debt settlement helps you:
- Settle your credit card debts fast
- Pay less than what you owe
- Save dollars and avoid bankruptcy
- Reduce annoying collection calls
Settlement - A way to get rid of your debts
So, they would try to recover as much as possible by agreeing to your Debt Settlement proposal.
Pros and cons of debt settlement
- You can save money through settlement
- Affordable single monthly payment
- You can get your financial life back in order
- The negative item will stay on your credit report for 7 years
- Your credit score may get reduced to some extent
- You may have to pay a tax on the forgiven debt amount
How a settlement company helps you in settling your debts
Monthly payable amount
Get rid of one debt
Settle multiple debts
Settling debts on your own vs. settling debts with professional help
|Settling debts on your own||Settling debts with professional help|
|Negotiation||You need to decide how much you can pay every month||The settlement company analyzes your financial condition and decides upon an affordable payment|
|Mode of payment||Usually you need to make one-time payment towards each of your accounts||You need to pay an agreed upon amount to the settlement company every month|
|Fees||You don’t have to pay anything other than the settlement amount to the creditors||You need to pay a certain amount as professional fees|
|How to decide||You want to save more money, but you should have proper negotiation skills to convince your creditors to agree to settlement||You want complete professional guidance to settle your debts, though you’ll have to pay a fee for the services provided|
How to choose a good settlement company
Check customer reviews of settlement companies to be sure that the one you’ve chosen offers services as promised
Make sure the debt settlement program complies with BBB (Better Business Bureau) standards
Checklist of BBB requirements to get enlisted:
- How long the business has been operating
- The number of and nature of complaints against the company
- Any licensing or government actions against the organization
- Transparency of the business
It is better if you choose a settlement company that has BBB accreditation. However, if you cannot find one, you can approach a law firm.
Know about some reliable companies or law firms where you can approach.
- Which one is a better choice - Settlement or bankruptcy?
- How long will it take to settle your debts?
- What will happen to the late fees when you’re settling debts?
- Can you get rid of your medical debt through settlement?
- Can you settle your payday loans?
- Will your wages be garnished if you opt for debt settlement?
- Can your creditors sue you during the settlement process?
Do’s and don’t's of settlement
- Organize paperwork when you decide to opt for settlement
- Be proactive and contact your creditors when you face difficulty in managing any of your debt
- Always finalize through written communication and you can take help of debt settlement letters available online
- Don’t overlook the effect of settlement while deciding which debt relief option to go for
- Don’t opt for a settlement program without shopping around and comparing various debt settlement USA companies