Have You Considered Debt Settlement For Your Financial Crisis?
If you are drowning in debt, debt settlement may be the answer you are looking for. Although it may have an impact on your overall credit rating, the damage is minor compared to other options, such as filing bankruptcy.
With debt settlement, you work with your creditors to pay off your debt, for an amount less than what you actually owe. For example, if you currently owe $10,000 on one of your credit cards, your creditor may accept $7,000 a payment in full. Generally speaking, companies will take anywhere between 25% and 75% of the overall balance. Creditors would much rather accept partial payment, rather than you filing bankruptcy, in which they will not receive any of their money.
A settlement company can help you negotiate your overall debt with your creditors. They act as a go between, for you and your creditors. Although you will be required to pay them a fee, they are very likely able to negotiate your debt down further than you would be able to yourself.
Once you creditors have received the agreed upon amount for your debt, they will then consider your debt as paid in full. At this time, the creditors will report to the credit bureaus that you have fulfilled your payment requirements. However, any of the debt that was delinquent before you began the settlement process, will still remain on your credit report.
A debt settlement differs greatly from debt consolidation. With debt consolidation, you will need to either obtain some type of loan or use a low interest rate credit card to consolidate all of your debt. Consolidating your debt simply means that you compile all of your debt into one easy to make payment. With either the loan or the credit card you will pay off all of your creditors in full.
If you choose to work with a settlement company, it is important that you choose one with a good reputation. While there are many legitimate companies out there, there are also companies simply looking to take your money. Therefore, check with the Better Business Bureau and family and friends before choosing a company to work with.
Companies generally do not advertise that they will do a debt settlement. Likewise, they generally do not make it an easy process for anyone looking to use a settlement as a means to end their financial situation. Often times, creditors choose not to work with consumers on a settlement until they are three to six months behind on their payments. Meanwhile, you are left trying to avoid debt collectors, until you make some type of settlement arrangements.
Although no one likes to believe they are drowning in debt and cannot meet their financial obligations, for many, this is a reality. There are a variety of different options that will help you get back on your feet. However, some of them, such as bankruptcy, can have a long term effect on your credit. Others, like debt settlement can help you eliminate your debt, without causing a lasting negative impact on your credit.
With debt settlement, you work with your creditors to pay off your debt, for an amount less than what you actually owe. For example, if you currently owe $10,000 on one of your credit cards, your creditor may accept $7,000 a payment in full. Generally speaking, companies will take anywhere between 25% and 75% of the overall balance. Creditors would much rather accept partial payment, rather than you filing bankruptcy, in which they will not receive any of their money.
A settlement company can help you negotiate your overall debt with your creditors. They act as a go between, for you and your creditors. Although you will be required to pay them a fee, they are very likely able to negotiate your debt down further than you would be able to yourself.
Once you creditors have received the agreed upon amount for your debt, they will then consider your debt as paid in full. At this time, the creditors will report to the credit bureaus that you have fulfilled your payment requirements. However, any of the debt that was delinquent before you began the settlement process, will still remain on your credit report.
A debt settlement differs greatly from debt consolidation. With debt consolidation, you will need to either obtain some type of loan or use a low interest rate credit card to consolidate all of your debt. Consolidating your debt simply means that you compile all of your debt into one easy to make payment. With either the loan or the credit card you will pay off all of your creditors in full.
If you choose to work with a settlement company, it is important that you choose one with a good reputation. While there are many legitimate companies out there, there are also companies simply looking to take your money. Therefore, check with the Better Business Bureau and family and friends before choosing a company to work with.
Companies generally do not advertise that they will do a debt settlement. Likewise, they generally do not make it an easy process for anyone looking to use a settlement as a means to end their financial situation. Often times, creditors choose not to work with consumers on a settlement until they are three to six months behind on their payments. Meanwhile, you are left trying to avoid debt collectors, until you make some type of settlement arrangements.
Although no one likes to believe they are drowning in debt and cannot meet their financial obligations, for many, this is a reality. There are a variety of different options that will help you get back on your feet. However, some of them, such as bankruptcy, can have a long term effect on your credit. Others, like debt settlement can help you eliminate your debt, without causing a lasting negative impact on your credit.