If you are reeling under the pressure of ever-mounting debts, you could consider working with debt collectors and creditors for making things more manageable. This is what is commonly termed as debt settlement or even debt negotiation. For instance, you could be settling a debt by negotiating with the creditor persuading him to agree a lower amount if a lump-sum is paid up front. Or maybe you could consider negotiating lower payments permanently or temporarily. So debt settlement is actually a debt repayment strategy which involves negotiating with the creditors for accepting and being satisfied with a partial payment for the debt. Suppose the creditor agrees, you would need to simply pay only a percentage of your total outstanding amount but the rest of your debt would stand canceled for good.
Even though many people are skeptical about using debt settlement, it is a viable option for many and could be beneficial in many cases. Often people are hesitant about debt settlement as an effective solution for eliminating your debts. This is frankly because of some debt settlement scams and largely because people are not adequately informed and they are usually lacking in sound knowledge regarding the benefits of debt settlement as a debt relief option. You must go through debt settlement reviews online to get a better perspective on the issue.
You Could Avoid Bankruptcy Thanks to Debt Settlement
The primary reason why most people opt for debt settlement is to avoid filing bankruptcy. You all must be aware that bankruptcy is a type of debt relief measure that would be following your entire life. Moreover, a tremendous amount of social stigma is attached to bankruptcy. It is a fact that the bankruptcy entry would be remaining on your credit profile/ report for the next 10 years and as you know while applying for jobs, loans or credit cards, you would be asked if you have filed for bankruptcy ever.
You simply cannot deny the fact because one look at your credit report, the bank would come to know that you have been bluffing and you would be adjudged guilty of fraud. Similarly, there is a risk of losing your job if you hide the fact at the time of job application. So bankruptcy involves a lot of issues and it better be avoided if possible.
Debt settlement if done properly with your creditors could assist you in avoiding the filing of bankruptcy and thereafter, tackling bankruptcy consequences. Moreover, debt settlement entry remains in your credit profile / report for only seven years. There would be no public records that would be evidence of the fact that you had gone for debt settlement.
You Could Enjoy Freedom from the Burden of Overwhelming Debts
If you are suffering from mental stress and agony because of overwhelming debts, you need to opt for debt settlement. The ultimate intention of debt settlement is not to penalize creditors by only paying them just a portion of the total debt accumulated by you. You should not be foolish to go on accumulating a lot of credit card debt hoping to settle it all.
However, remember if you are legitimately encountering an issue in paying back what you actually owe to your creditors, debt settlement could be a viable option for you. Once you have successfully negotiated with your creditors and settled your debt, you are free from the stress and tension of debt without losing much time and also, at a much lower cost when compared to the usual repayment schedule.
Debt settlement proves to be beneficial to many people in terms of cost and the time involved. Moreover, it is a good way of staying away from filing for bankruptcy. If you are on an effective debt settlement program, it would take only about two to a maximum of four years to repay your debts. This is certainly much less time as compared to the time involved in paying back all your debts normally. Even credit counseling, debt consolidation and also Chapter 13 bankruptcy takes 3-5 years for debt repayment. So if you are interested in getting rid of your debts quickly and without involving too much cost, you could consider debt settlement depending on the specific requirements of your case.
Author Bio: Jennifer Hartley is a debt relief officer in a private debt management consultancy firm based in California. She runs her own blog on finance, debts and debt relief options and techniques to manage debts efficiently. She advises her followers to go through debt settlement reviews thoroughly to get a clear picture.