Newbie looking for Debt Settlement Help

Excellent questions.
Once you complete a settlement program it should take about a good year at least of perfect payment payments on time to reastablish your paymenet history. That is also under the assumption you learn from your mistakes and don't aquire more credit card debt again. The answer to your other question is hard to say. The way the housing market is it could affect it . Lenders are wanting more money down to aquire home loan. Plus they will scutinize your debt to income ratio and thats why its important you don`t get right back in debt again after you complee a settlelment program. One positive way to look at the situation is that it sounds like overextended and its only a matter of time before your bills go late anyways so debt settlement sounds like a good option for you. I strongly suggest you shop around and compare settlement companys and BE SURE YOU LOOK THEM UP ON THE BBB.

Option # 1
credit counseling is great if you are not overextended and simply need to high interest rates lowered and have one payment. On average the APRs will be lowered somewhere around 6-8 %.If you can afford the payment for a dmp with a Credit Counseling Company you should.However if that payment is too much then you should consider a debt settlement program.
Pros : doesn`t hurt fico score , one payment with lower aprs.
Cons : payment is around the same as what you were paying before so if you are overextended it doesn`t help. Plus it shows on your credit report that you are in DMP with them and doesn`t come off your report till you complete the DMP.

Option # 2
Debt settlement is an aggressive program and best for consumers that don't qualify for debt management, can't continue paying minimum payments, can't borrow to pay off debts and don't want to file bankruptcy. With Debt Settlement you will pay back is typically between 40% and 50%.

Pros: One payment about half of what you were paying. Settling your debt for 40-50%. Avoiding bankruptcy.
Cons : Bills have to be delinquent in order to get creditors to negotiate and thus hurts your credit score. Anoying collection calls from creditors , and possibility of judgement and garnishment. THATS WHY I SUGGEST YOU WORK WITH A COMPANY WITH A GOOD REP. PLEASE CHECK OUT ANY COMPANY WITH THE BBB TO MAKE SURE THEY HAVE A GOOD TRACK RECORD.

For a comparative overview on pros and cons of various debt relief programs like debt consolidation, debt settlement, Bankruptcy and Self Repayment you can go through the following link:-
http://www.debtconsolidationcare.com/debt-solution.html

Dear Adamramey,

What is your credit score now?

I want to inform you that debt settlement can adversely affect your credit score dramatically and consequently score may plummet by 250 points.

Regards,
Phoenix

For pros and cons of consolidate debt loans...follow this link

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Thanks for all the advice...I am still mulling things over. My credit score was 720 two years ago and has now dropped to 620 (maybe even lower) due to a high debt to income ratio.

Hello Adamramey,

You have mentioned in your post that your credit score is now near about 620. In such a position if you opt for debt settlement then the score is bound to fall sharply to anything between 370-420. Believe me, such a score is a very bad one to qualify for any type of loan or credit.

For more customized and expert help you can always chat with the community????????s financial coach for expert advice. Click these links for chatting with the financial coach: -
http://www.debtconsolidationcare.com/debtcclivehelp/index.html
or http://www.debtconsolidationcare.com/aaron/ .

You can also call this community????????s Toll-Free Phone number 800-601-1579 (9am-6pm PST) for free consultation.


Regards,
Phoenix

We are in a debt settlement program and have not even looked at our credit scores lately. We know what they were just before we started and will look at them again after all has settled. We know they will eventually rebound so are in this for the long haul. Would we do it again? You better believe it. We too had good credit and had never missed a payment. But we were to the place where we couldn't pay the bills, even the minimums anymore. Something had to give if we were going to keep a roof over our heads. There's no reason to water your grass when your house is on fire and there's no reason to protect a credit rating when you are BROKE and swimming in debt.

Hello Lisawilliamson,

I respect your opinion. I do agree with you that in severe debt condition (almost at the brink of bankruptcy), one should go for debt settlement.

But in case of Adam, his debt position is not that bad and can manage his finances either through Self Repayment Plan or debt consolidation and avoid affecting his credit report.

Getting into debt problem is a common phenomenon now-a-days and it is becoming that more difficult to make the two ends meet. Thus, credit and loan requirement never ends. That????????s why it becomes that more important to look at the credit score before taking a final decision so that in the future we don????????t find problem in getting loan/credit at the time of real need.

So, it is always desirable to look before you leap.

Regards,

Phoenix

Phoenix,
I totally agree. I don't know how close he is to not being able to make payments. I know we were only a few months,maybe weeks, from bankruptcy. Settlement was our only option. Unless someone is that far gone, I would suggest they do anything to avoid it, starting with a huge garage sale. We were avoiding bankruptcy at any cost. While it has been the best for us, it certainly isn't for everyone.