There are a few debt relief options you can choose from ? paying on your own, credit counseling, debt consolidation, debt settlement, and bankruptcy. Each option has their own pros and cons, but if you?re leaning toward debt settlement, you may like what this solution has to offer.
With debt settlement, your monthly payment is based on what you?re able to pay. Payments under most of the other debt relief options are based on what your creditors will you to pay and they?ll only go so low. If you?re simply unable to make those minimum payments, debt settlement may be a better option since what you contribute toward your settlement payment is based on your budget. Note that some settlement companies want to settle your debt in a certain amount of time, so that may mean your monthly payments are set based on that time period.
You can settle debts even if you?re past due. As a matter of fact, your debts have to be delinquent before most creditors will accept a settlement offer. On the other hand, your accounts have to be current to go into a credit counseling agency?s debt management plan. While you can consolidate past due debts, it may be hard to qualify for a low interest rate debt consolidation loan if you have negative payment history on your credit history.
You?ll save thousands of dollars on interest by settling your debts because you?re settling your debts in just a few years, instead of paying on them for decades. If you were making the minimum payments on your debt, you could pay more than double your debt in interest alone. In settlement, you shave off all those years that you?d otherwise be paying interest. In addition, you would settle any interest that had already accumulated on your account.
You can settle debts on your own or you can hire a debt settlement company, you choose based on what you?re comfortable with. Other solutions require you to include a third-party ? the credit counseling agency, a lender, or the bankruptcy court. Settling your own debts lets you avoid the middleman and avoid fees you pay to the debt settlement company. On the other hand, if you?re not comfortable settling with creditors, you can hire a debt settlement company. It?s great to have the freedom to choose.
Debt settlement gives you a little breathing room, mainly because you?ve made a conscious decision to stop paying your creditors and instead focus on coming up with enough money to pay off a lump-sum portion of your balance. Once you decide to settle your debts, you can stop worrying about what you?re going to do and instead start doing it. You don?t have to worry about the impact to your credit, because, by choosing debt settlement, you?ve acknowledged that your credit takes a backseat for a few years until you?ve gotten the debt out of the way.
Debt settlement has gotten a bad reputation from unscrupulous companies who took advantage of debtors. Fortunately, new federal law has almost eliminated these companies, making the benefits of debt settlement a lot more apparent.
This guest post was written by Steve Dowell, a professional writer specializing in topics related to personal finance, debt relief, credit repair and more. Pass through debtsettlement.com for more tips and advice.
from ezine articles.Source: http://freedom-debtrelief.org/benefits-of-debt-settlement-over-options/
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