Debt Settlement Explained
If you're feeling overwhelmed by the stack of unsecured credit card bills on your desk, it might be time to consider one of the most effective ways to eliminate your debt, a program known as debt settlement. As you may know, there are multiple ways to consolidate your unsecured debt into one easy to handle monthly payment. That being said, you should always consider all options thoroughly before choosing a particular plan.
Debt consolidation loans are best for people who have good to excellent credit and a reliable income to make monthly payments. However people in tough financial situations or those who need a significantly reduced payment, may be better for programs like debt management or settlement. If you’re serious about reducing your monthly payments, we strongly encourage you to contact us today. We can help you easily understand how debt settlement works and how it can help you get the payment relief you need and deserve. Debt consolidation is what we do best, so get started today. Life House experts are standing by ready to help.
How Debt Settlement Works
Debt settlement takes an aggressive approach to reducing your bills. This type of consolidation program can help eliminate your debt within an average period of 24 to 48 months. This process is sometimes referred to as debt negotiation, forgiveness or credit advocacy. After you retain a debt settlement company, they will help you communicate with your creditors and will work to reduce the overall balance of the accounts you owe. Unlike a debt management or counseling program, settlement does not reduce the interest but instead the actual balance of what’s owed.
For example, if the total amount of debt you owed was $10,000, the debt settlement or negotiation company would work on a settlement as low as 50% of what you owe, or $5,000. This means instead of paying back $10,000 plus interest, you would pay back a total of $5,000. As you can see this can be a big savings.
This is an extremely aggressive approach to eliminating debt, and will have a negative affect on your credit history. Because it can have a negative impact on your credit, debt settlement is usually only for those individuals who do not qualify for debt consolidation loans, but that also hope to avoid bankruptcy.
The Positive and Negative of Debt Negotiation
In many cases, settlement is the most cost-effective way to solve your debt problems, without filing for chapter 7 or 13 bankruptcy. With a debt negotiation company, you may be able to save up to 50% on what you owe. However, the pros of this debt consolidation solution do not come without some risks.
Debt settlement will show up on your credit report and will impact your overall credit score. You may also receive calls from collectors or directly from the lenders holding your debt. There is also the possibility your credit won't settle and instead could file lawsuits against you.
Debt Consolidation Best Practices
For some people, the positive aspects of debt settlement strongly outweigh the negatives. But everyone’s situation is different. Whatever your financial situation Life House can’t stress enough, before moving forward with any debt relief option, you need to consider all programs available. Even more important, you should always read the fine print on all paperwork and certainly sleep on it for a few nights.
If you would like to know more about this debt consolidation option or any other solutions that may be potentially available to you, give us a call or submit your information today. We will provide all the information you need about debt settlement, debt consolidation and other viable solutions without pressure. We love to save people money and debt consolidation is one of our company's favorite was to do it. Get started now and we'll get you connected with an expert debt settlement representative immediately who can answer all your questions at no obligation.