How Debt Settlement Can Help You
Debt settlement could be the solution that can free millions of Americans from their debts
. It is unfortunate, though, that a large portion of the population remains uninformed about debt settlement. There is definitely enough information available online to create modules on the topic.
Debt settlement, or the agreement between borrower and lender to settle debt for less than the actual amount of money owed, has been around for a long time. The process was formalized only in the recent decades by the banking industry, as a response to the growing number of consumers failing to pay their debts on time. Debt settlement has been gaining popularity, especially as the country is going through financial crisis, because of the consensus that it is the quickest and least expensive way to get out of debt.
Debt settlement, however, is not for everyone. Settlement negotiations only begin when your debt settlement firm has analyzed your finances and declared that you are in a financial position to begin your settlement. This means that if you want to settle your debts but still do not know where to get the money from, you will automatically be ineligible for a settlement. Also, your firm will probably tell you up front in the first meeting that not all debts are entitled for settlements.
The
debt settlement solution may not applicable for all debtors, but it is for most. The average consumer, if capable of functioning within a schedule and a rigid budget, can get out of debt in as short as two to three years. You can also go for a lump sum payment of a percentage of the debt and have the entire debt amount considered paid off thereafter.
The
debt settlement solution can be your safety net to bankruptcy, if bankruptcy is something that youre trying to avoid. However, the process may cause some accounts to charge-off before being settled, and can result in more missed payments. If you value your credit rating more than paying off your debts at your own pace, then debt settlement is not for you.
Finally, the
debt settlement solution is an option only for people who have limited financial capabilities to pay off their debts. It is the a way of cutting struggling consumers and debtors some slack, so settlement is not a recommended option for those looking to merely pay less for their debts.
by: Ethel Schaaf
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