If you’re at all paying attention to the television or advertisements in newspapers and magazines you have heard a lot about debt settlement. You may have heard that it can save you thousands; you may have heard that debt settlement is the answer to your prayers. But what about your debt situation and debt settlement; how can debt settlement work for you?
It’s an interesting question to consider and one which should be pored over carefully before undertaking.What is Debt Settlement: Unlike Chapter 7 bankruptcy or another debt forgiveness program, debt settlement is the next best thing to payment in full. When you are working with a debt settlement company they will approach your creditors and agree on an amount which can be paid to settle the debts. Hence the name.
Why Debt Settlement: Problems with nagging debts is nothing new for a great deal of people; we all would just like to wipe the slate clean and start over. However to some the prospects of going through a full bankruptcy is just too much. The invasion of privacy, the fact that a bankruptcy stays on your credit report for 10 years; it’s all a bit much. If the debts can be negotiated down and settled that is far preferable for some as opposed to claiming a bankruptcy.
How Does it Work: With a debt settlement you cobble together all your accounts and bills with various creditors, you give that to an agency and then they work directly with those creditors on your behalf. The settlement agency will typically work out some kind of a system where they negotiate the amount of your bills down and then you pay the agency after services have been rendered.
Is debt settlement something that’s for you? That really depends on the particulars of your situation. If you are considering going with a settlement agency it’s a good idea to read up on their past cases and get multiple competing offers so that you know you’re getting the best deal. Also make sure the company you’re dealing with has been in business for years and has a strong BBB rating.