Debts can be depressing. It's hard to improve your financial condition, unless you get rid of your debt burdens completely. In case, you're finding it too difficult to get rid of your outstanding bills and dues, you can opt for settlement.
Settlement seems to be a promising debt relief solution since it brings about a reduction in the total debt amount. The debt settlement process involves negotiation with the creditors, as a result of which the creditors accept a lesser amount than what is owed by the debtor, and still consider it as full payment. Thus, it works well for those who're carrying large debt loads and finding it difficult to repay those in full.
Debt settlement programs or services can be of help if you:
You can evidently try to settle your debts on your own. However, the process usually involves effective negotiation. Thus, choosing an attorney to represent you makes more sense, when you want to settle your outstanding bills. Check out the chart to find out whether to choose DIY settlement or to hire an attorney for the settlement process.
|Consulting an attorney||Do It Yourself (DIY)|
|Getting genuine assistance|
|Help with legal representation|
|Guidance while signing legal papers|
|Elimination of collection abuse|
|Getting professional help with negotiation|
|Reduction in principal debt amount|
Forgiving a major portion of the outstanding dues is the basic essence of settlement. The creditors evidently lose out money when they allow a debtor to settle his dues. Yet, they accept a settlement offer when they realize that the debtor might file bankruptcy otherwise. If that happens, the creditor may lose his chance of extracting money from the debtor. A settlement offer allows mutual benefits for both the debtor and the creditor. While the debtor can pay off his dues at a lower amount and avoid bankruptcy, the creditor is able to get back a significant portion of the original debt.
Not everyone can take advantage of the settlement process, since creditors only agree to settle debts if:
The professional companies, offering settlement services or programs, usually prefer to work with consumers having debt of $10,000. If you have a low debt amount, you may either search out for companies that agree to settle debts lower than $10,000, or try to negotiate with the creditors on your own.
Nowadays, many consumers fall prey to debt trap and reach out to debt settlement companies only to find out later that they have been scammed. Today, we come across a lot of debt settlement scams and most of the scams are a result of lack of information on the debtor’s end. If you want to avoid [...]
1. How will debt settlement affect my credit score? When you first enroll in a debt settlement company, your credit score will go down. However, as your creditors report your accounts as “paid” or “settled” your credit score will recover. It is true that debt settlement is a great way to [...]
Choosing between debt settlement and bankruptcy in the face of mounting debts is a tough decision to make. It is important to understand that although both the options aim at offering debt relief, they work very differently. So, in order to make an informed decision, you need to understand these [...]
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