Why we should settle our debt?

Get Relief From Overwhelming Debts If you’re legitimately having trouble paying back what you owe, debt settlement may help you. Once you’ve negotiated and paid your settlement, you’re essentially debt free in less time and at a lower cost than if you tried to pay off your debts on a typical repayment schedule.

What are the advantages and disadvantages of debt settlement?

The advantages of debt relief programs are that they offer professional financial assistance and can help consumers use money management strategies to reduce their debt. The disadvantages are that these programs do not guarantee results and sometimes use misleading advertisements to lure consumers.

Does settlement hurt your credit?

Yes, settling a debt instead of paying the full amount can affect your credit scores. Settling an account instead of paying it in full is considered negative because the creditor agreed to take a loss in accepting less than what it was owed.

Is it bad to settle debt?

Although settling an account is considered negative, it won’t hurt you as much as not paying at all. And, if you are planning on making a major purchase, such as buying a home, you may be required to either settle or pay in full any outstanding delinquent debts before you can qualify for a loan.

What should I do if I have a debt settlement?

Consider consumer credit counseling, which helps you enter into a debt management plan with your creditors. There’s a possibility of reducing your monthly payments, and you’ll still be able to pay your balance in full, which is reflected on your credit report.

Is there a guarantee that debt will be settled?

But debt settlement can be a long process, and no debt settlement company can guarantee results. There is a chance that you may not see all your debts settled under one of these programs.

Are there any drawbacks to debt settlement?

Drawbacks of Debt Settlement. Of course, there are negative consequences to debt settlement. Creditors aren’t guaranteed to agree to settlement offers, your credit will suffer in the meantime (if it hasn’t already), and you may owe taxes on the amount of debt that’s canceled.

How long does it take for a debt settlement company to come to terms?

The whole process typically takes 26 to 48 months for the debt settlement company and the credit card company to come to terms. During this time, interest and late feeds will make the total grow. Your late payments get reported to the credit bureaus, your credit score drops, and you might begin receiving collection calls.