Debt Settlement Facts - Why You Have to Go Delinquent If You Want to Settle Debts

Debt Settlement Facts - Why You Have to Go Delinquent If You Want to Settle Debts

This article aims to throw some light on a few debt settlement facts that may not be very conventional but have proved to be effective. There are various ways to settle debts either with the original creditors or, the collection agencies. One may choose to do it oneself or, seek the help of experts like the debt settlement agencies.

Although legal ways to settle debts is always judicious, sometimes bending the rules can also yield results without being put behind bars. Threat of bankruptcy is a very potent debt settlement fact. A consumer may not be close to bankruptcy but may find it very difficult to repay the monthly installments with alarming interest rates. This may cause him or, her to miss out on a few months of payment. This in turn invites the creditors to step in and make their demands.

At this point the creditor already knows that something is wrong with the finances of the consumer and is prepared to reap whatever percentage of the debt owed to him. The enlightened consumer also knows that forceful extraction is a bad idea as he may file bankruptcy which will neither benefit the consumer nor the creditor. The creditor therefore will be happier to settle debts than to return with nothing.

The other debt settlement fact which goes around the rules is to patiently wait till the statute of limitations (SoL) on that particular debt is over. Statute of limitation is the legal time frame within which the creditors can collect their debt. If by any means, the consumer can delay the credit collection (which could include bankruptcy threats) till the SoL is over, then there is no way a creditor can charge the concerned person for payment. The SoL for different debts is different. It may vary from state to state also. So one should keep a check on the SoL that applies to his or, her debt.

Any kind of negative marks on the credit report will as a rule disappear after 7 years. So if the debt remains unpaid for all this time, it will legally cease to appear on the credit report. CAUTION: If the SoL of the debt still exists for longer than 7 years, then the consumer can be sued for the same debt. If both the conditions (expiry of SoL and expiry of 7 years) apply, then the consumer can walk home free! all these methods are to be applied only when the situation very bad and no other option seems to work. People who have dealt with similar situations.

Debt settlement companies are widely available in just about every state however some are just flat out more experienced than others in debt negotiation. That's why it's so important for consumers to use debt relief networks. These networks qualify and only accept the best performing debt settlement companies.

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