Why Go For Debt Settlements?

Posted by Christian Debt Services on October 29th, 2019

Money cannot buy happiness, but it sure can buy many things that give you complete peace of mind. So, it is very important to maintain a good amount of money to avoid such financial crisis and stressful situation.

Bankruptcy is one of the most critical situations, which any individual has to ever face in his life. You need a lot of support and spirit in order to get out of this because a bankrupt individual may lose all his confidence due to this financial crisis.

In this situation, a Debt settlement option is very successful. In Debt settlement both the creditor and the debtor agree to settle an outstanding debt for a certain amount of money which is affordable by the debtor, usually to be paid in single lump sum.

A person who is considering debt settlement as an option should be aware of both its positive and negative prospects.

In order to make it affordable for you, the lender may drop or lower the interest rate, other charges like late fee, penalties as well as the actual debt amount can also be dropped by their banks.

Credit card debt settlement is one of the best examples. You can pay off your debts to the creditors which in turn make you able to start building up your credit profile again. On the other hand, the debtor should fully aware of the debt settlement companies who charge upfront fees and huge document processing charges. Ideally, you would want to look for a company that does not charge a fee until settlements are madeand will not charge more than 20to 25 percent of the outstanding balance.

The Positive Side of Debt Settlement

Debt settlement can be extremely helpful to a lot of those who are carrying a heavy debts overt them. You can get out of debt for nearly half of the full outstanding amount. Obviously, this can save you a lot of money. Your credit status will be improved. In some cases, creditors will even agree to delete negative credit score.

The Negative Side of Debt Settlement

There are a few negatives also, but most of them should be avoidable to the consumer with a genuine agency on your side.Banks have the option of reporting the settlement to the credit agencies as you settled the debt rather than full payment, so make sure you know in advance what they plan to do in that regard.

Lastly, make sure you receive the terms of the settlement are very clear and understandable.Collection agents are required to report any settled debt to the credit agencies, which can be counted as taxable income for you.

Christian Debt Services

About the Author

Christian Debt Services
Joined: June 21st, 2017
Articles Posted: 21

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