Debt settlement refers to a debt relief process where you have your debts lowered through negotiation with your creditor. The negotiation part would be taken up by a debt settlement company. Debt settlement is often the most viable option if debt consolidation does not work. If you are not ready to take a new loan as per the debt consolidation principle and are looking to reduce the debt as fast as possible, debt settlement will be an excellent choice for you.
The post below offers a brief on debt settlement benefits.
Helps to Avoid Bankruptcy
People tend to declare themselves bankrupt when they are unable to pay their existing debts any more. However, bankruptcy is no doubt a very perplexing situation where you there will be legal proceedings and you have to meet a judge. It’s also embarrassing no doubt, not only for you, but your family as well. Moreover, the stamp of bankruptcy stays on the credit report for as long as 10 years.
However, when you go for a debt settlement option, your settlement counselors will work to reduce your debt to a reasonable amount which is affordable for you, ensuring no embarrassing bankruptcy declaration on your part. The seasoned debt settlement professionals are backed by expert negotiation skills and they would be able to slash down your debt to a manageable situation for you. Moreover, the stamp of debt settlement stays just for 7 years on your credit score.
Takes Less Time
This is one of the best advantages offered by debt settlement programs over the other debt relief solutions. A reliable debt settlement company will help you to repay the existing debts within 24-48 months only. On the other hand, it will take 3-5/6 years if you go for a debt management or debt consolidation plan.
After your settlement is over, you would be able to rebuild your credit. There won’t be any stress of juggling the monthly bills, high debt burden, late fees etc. Instead, you will have a faster route to improve your credit and get your financial status back in proper control- way quicker compared to other debt relief alternatives.
The debt settlement companies also assure a sizeable reduction of your existing debts. In most of the cases, the debt settlement plan can negotiate a 50-60% reduction of the current debt which is definitely something big for any debtor. Such a huge reduction at a faster pace would definitely assure immediate relief for your personal financial condition. Yes, you would still have to handle multiple payments, but you would be in a more manageable status.
Available with Bad Credit
Debt settlement is a good option for those down with poor credit scores. A bad credit score severely affects your chances of getting a suitable new loan to pay off the existing debts, but you don’t have to face such issues with debt settlement programs.
No Harassment Calls
Your debt settlement company will itself deal with your creditors and make sure that you stay protected from the harassment calls or visits from the creditors and collectors.