If you have the finances to accomplish debt settlement, you can get out of debt
quickly and permanently. As the name implies, debt settlement refers to an
amicable agreement reached between yourself and a creditor for either one lump
sum, or a structured payment plan, in order to achieve a discounted payoff on an
account. Below are five reasons to consider this option for getting back on the
road to financial freedom.
Say goodbye to your bills. With debt
settlement, your bills are gone for good. In most instances, a settlement will
result in the creditor closing your account. While this may seem difficult,
especially if you have become reliant on your credit card(s), it will prevent
you from using them again in the future and rebuilding a mountain of debt. Debt
settlement you to wipe the debt away permanently.
Your phone will stop
ringing. If you have ever been late with one or more bills, then you already
know that creditors begin calling at 8 a.m. and are not legally required to stop
calling until after 9 p.m. at night. Depending on how many bills you are behind
with, your telephone may be ringing at all hours. This is not only unnerving to
you and your family, but it gets even worse when the collections department
makes you feel terrible about your situation. With debt settlement, the phone
will stop ringing because you will no longer owe anything on a settled
account.
Avoid legal action & bankruptcy. Depending on the amount of
debt that you owe to a particular creditor and the severity of the delinquency,
they may pursue a civil judgement against you in order to recover payment. Once
a judgement is entered, the creditor can petition the court for permission to
garnish your wages, attach to your bank account or other legal methods used to
collect a debt. A debt settlement will prevent this from happening and will ease
your mind about ever getting served with lawsuit papers. In addition, settling
your debts will enable you to prevent the filing of bankruptcy, which is a
stressful process and the worst blemish that you could have on your credit
report. While a bankruptcy will remain on your credit file for up to 10 years, a
debt settlement will expire after 7 years.
Improve your credit score. How
can debt settlement improve your credit score? At first, it may not help that
much. But compared to the alternative of continued late or missed payments,
mounting debt related to late fees and penalty interest, a settlement will be
much better for both you and your credit report. At the very least, debt
settlement will show that you have attempted to repay your debt(s) and, at best,
your credit score will improve as you slowly begin to rebuild your
credit.
Eliminate your debt at a fraction of the balance. With debt
settlement, you agree to pay the creditor one lump sum, or structured payments,
to eliminate the debt altogether. In exchange, the creditor agrees to accept a
fraction of the balance as full payment. Quite often, you can settle a debt for
as little as 20% on the dollar, which means a $10,000.00 debt could potentially
be settled for $2,000.00. If you were to continue making payments on that same
account, combined with interest rates, you would likely end up spending
$20,000-30,000 before finally reaching a zero balance. With debt settlement, you
are not only saving the obvious difference between the balance and the
settlement amount, but you may also be saving a considerable amount of money in
interest.
