Debt Settlement: Why it May be a Good Option
Debt settlement is a strategy in which a debtor successfully negotiates to pay part of the amount owed to a creditor as a 100% clearance of their entire debt. As long as the creditor is satisfied, you only repay a percentage of what’s owed, with the rest of the debt being offset entirely. Many debtors find this approach advantageous in many ways depending on their specific financial circumstances.
Below are examples of merits of debt settlement to overwhelmed debt consumers:
You May be Safe From Bankruptcy
A lot of debt consumers choose settlement as a way to evade bankruptcy. Bankruptcy is capable of solving your financial woes depending on your situation, but it forms an indelible dot for as long as you live. Your credit record will stop bearing your bankruptcy information after 10 years, yet, you may have to indicate if you ever declared bankruptcy each time you seek a loan or employment. You may be considered guilty of fraud for denying that you once filed bankruptcy after your lender proves otherwise at some point. You could also be fired for not telling the truth.
When you settle debts with your creditors the right way, you won’t have to file bankruptcy or deal with its potentially devastating outcomes. After seven years, your credit report will stop revealing your debt settlement. Again, public records will not show you settling any debts anywhere, and after the credit report time limit for your settled accounts has elapsed, this issue is forgotten forever.
Relief From Excessive Debt
Settling your debts with creditors is a practical solution especially if you have valid explanation for not paying back your debts. Once the settlement is paid as negotiated with your creditors, you become free of debt within a shorter duration and at lower costs compared to trying to pay off as per the initially agreed plan.
Equally relevant, a good number of lenders are well-disposed toward settling rather than bankruptcy. In a lot of scenarios, creditors won’t squeeze a lot from you, including under a Chapter 13 bankruptcy filing, unlike what settling can offer them. But any bankruptcy filing under Chapter 7 diminishes the likelihood of creditors recouping something. The majority of such creditors will want to avoid this in case there’s a more viable way out, so they may accept your offer.
It’s possible to settle your debt obligations in two to four years if you’re on a well-structured debt settlement program. That means you’re able to start reorganizing your finances sooner without the burden of paying out any amounts on a pre-agreed schedule.
Debt settlement may be your legitimate key to financial freedom sooner. Engage your creditors with a view to settling in a way that resolves your financial circumstances today and tomorrow.