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Is it better to settle debt or pay in full?

Submitted by velma on Thu, 11/10/2016 - 21:36

My friend's sister, Sara, is facing difficulty to manage her finances. It's easier for her to opt for settlement if the creditors agree. However, we know that paying debts in full is better. However, through settlement, one can get rid of debts easily and start managing finances better. So, can you help - Is it better to settle debt or pay in full?

Paying off debts in full is always better. It helps to raise credit score. Opting for settlement can help someone to get rid of debts fast but it can reduce credit score. However, when one can't make the full payments, he/she can negotiate with the creditors and opt for settlement, and then budget well and manage finances better to raise score.

Submitted by Good Nelly on Fri, 11/11/2016 - 04:45

Good Nelly

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I agree with Good Nelly. Don’t worry if you’ve opted for debt settlement. Initially, your credit score will go down. But, with time it’ll get a boost only if you avoid doing those things that might hurt your credit score.

Submitted by Phil Bradford on Mon, 11/14/2016 - 03:06

Phil Bradford

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