Top 4 reasons for the debt settlement program
Debt settlement is a very rewarding solution for some consumers. Debt settlement has gotten a bad name in recent times, but this is basically due to misunderstandings. Some consumers may seek help from a debt settlement company and not know what they are actually doing. One must find a reputable company that will take the time to explain all of the pros and cons that the debt settlement has to offer. Some consumer may think that they are doing a debt consolidation program when they are actually entering into the debt settlement program. This should always be explained to each and every consumer who is seeking the help.
In summary the debt settlement program is usually for those who have fallen behind or who are in collections. In some cases consumers know that they will not be able to continue their payment and need the help that settlement will provide. It is a fast ways to rid yourself of debt and start anew by repairing your credit. The consumer’s debt balances are settled to a lowered amount between 40 to 70 % while receiving a low payment on the settled balances. This is a very welcome relief for those who have found themselves in financial trouble. Consumer should look into the debt settlement program before entering into bankruptcy for many reasons.
The top 4 reasons for debt settlement
First, Debt settlement programs allow the consumer to pay off their debts more reasonably without completely harming the credit score. When filing for bankruptcy one is scarring their credit score for seven to ten years regardless of any attempt to pay back. Their credit score will show the bankruptcy for a very long time which can hinder any further financial endeavors. When receiving assistance through debt settlement ones credit can be restored when the debts are paid off. This length of time is usually anywhere from 12 to 48 months. It is basically up to the consumer on how fast they pay the debts off.
Second, the debts are lowered as well as the minimum payments and interest. When trying to settle the debt without having a company to back you the results won’t be as good. One may be able to settle the debts but the creditors usually want the money upfront. Debt consolidation companies are able to establish a low payment on the settled debt making it a little less stressful for the consumer. Having a low minimum payment on the settled debt is so much more manageable for all consumers. Debt settlement companies are also able to get rid of the interest in order to give the consumer the options to pay the debt off sooner.
Third, having no interest is a huge deal when it comes to paying off ones debts. At first paying a low minimum payment will help, but when times are easier the consumer has more options. At any time the consumer can pay more each month or pay the debt of all together without penalty fees or interest.
Fourth, the debt settlement program is a fast effective way to become debt free. Once the debts are paid one can start to establish some type of history of credit. The best way to go about this is to get a pre-paid credit card and keep a clean record of payment for a few months. This will show the creditors that you are responsible and they will be more willing to assist you.