What You Should Know About Debt Settlement

You might be faced with overwhelming credit card debt and have not made a payment in months. Creditors are calling you on a daily basis demanding payment. Does this sound familiar? For some, debt settlement may be an option. But before you decide to move forward, here are some items you might want to consider.

By settling your debt, you can save up to 50% of more off the original debt amount. Because you’re reducing the amount owed, you will become debt-free much faster than if you were to make the minimum monthly payments.

Many have contacted their creditors directly with success, but others would prefer to use a professional settlement company to handle the negotiation process which could take several months. Persistence is the key to any successful debt settlement.

Some settlement companies also offer help settling business debt. Small business owners have also been hit hard by the recent tightening of credit, resulting in large debt that could force them out of business.

Debt settlement is another option to consider before filing for bankruptcy. Due to the recent changes in the law, it has become harder to qualify for bankruptcy. As always, check with a legal advisor for your particular situation.

Please keep in mind that debt settlement is not for everyone. Settling your debt is an option for those who have a high amount of debt and have been unable to make payments, usually for several months, due to a major financial hardship.

You may further damage your credit, due to payments not being made to your creditors until you have enough funds to make a payment. You most likely will continue to receive calls from your creditors until a settlement is reached. Any savings from a debt settlement may be taxable. Please consult with a tax advisor.

If you decide to use a settlement company ask how they are compensated. Some companies charge up front fees while others may charge a percentage of the savings from your settlement. Depending on how high the fees, you have to decide if its more feasible to do it yourself.

Always check to see if the settlement company has a high number of complaints reported to the Better Business Bureau. You may also want to do further research on the company by using internet search engines.

Again, debt settlement is not for everyone, but may be considered as alternative when faced with a major financial hardship. Due to the current economic climate, many are looking to debt settlement as an option.

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