Debt Settlement - Frequently asked question and answers
What happens when I do debt settlement?
The debt settlement program is a basic negotiation of ones balances to a lowered amount. After the debts are settled an affordable monthly minimum payment is established in order to pay back the debts in a more manageable way. This program is very beneficial for consumers who have fallen behind on their debts, are in collections or unable to pay their debts at all.
Will debt settlement harm my current credit score?
When deciding to do thee debt settlement program chances are that your credit is already in jeopardy. Debt settlement will show on ones credit for a short time, but may be improved after the debt is paid. Unlike bankruptcy that stays on one credit for seven to ten years the debt settlement program is extremely shorter. Debt settlement will take anywhere from twelve to forty eight month depending on the consumer.
What type of debt am I able to add in this type of program?
Debt settlement is usually for debts that are falling behind or in collections. An example of debt would be unpaid student loans, credit cards, collection accounts, basically debt that are not secured to ones assets.
What happens if the creditor decides to not settle the debt?
This would be a rare occurrence due to the creditors wanting to get some type of payment rather than no payment at all. If the creditor does not agree at first chances are that they will due to this reason.
Can I still be sued for these debts if the creditors do not agree?
The possibility of this happening would be very rare. The creditors do appreciate the attempts that are being made to pay the debts and will most likely keep it as such. Ignoring the debts would be far worse that making an honest attempt to pay the debts back. This usually is a welcomed appreciation from the creditors.
Do I have to have an attorney when doing debt settlement?
It is not required to obtain an attorney when doing debt settlement. Any reputable company will offer their legal services to the client if at any time it is needed. The debt settlement program is a program that is done outside of court so no legal representation is needed.
How do I restore my credit after doing the debt settlement program?
If at all possible one can start to restore their credit before finishing the debt program. The most effective way to do this is to get a prepaid credit card. It is extremely important that one keeps up on the minimum payments in order to show a responsible credit history. One should follow up with the credit bureaus after the debt settlement program as well. Make sure that all paid debts are removed from your credit report. If one notices that there are debts still lingering on their report make sure that this is addressed. Write to the bureaus stating that the debts need to be removed.