Debt Settlement Saves You Money
The process of settling your debts involves a negotiation with your creditors to settle for less than the amount you owe. The average settlement ranges from 40-60% depending on the creditor. We have achieved some settlements are for as little as 20% of the principal balance. Your credit rating will likely be damaged during the enrollment period, but each settlement will be noted by the credit reporting agencies as “paid in full” or “settled in full” – meaning you paid your debt for an agreed upon settlement.
With a debt management plan through a consumer credit counseling agency, you will still have to pay the full principal balance along with some interest (7-10%). This process will still take an average of 5-7 years. Their role is little more than glorified collection agencies. Remember, they are partially funded by the Credit Card Industry itself working for them, not really you (the client).
Bankruptcy stays on your credit report for ten years, dragging you into the “high risk” credit category. When it is time you need to purchase a car or home using credit, the interest rates and conditions will end up costing you much more, if even an approval. Even if you plan to rent a house or apartment, the rental office will pull your credit history and see your bankruptcy filing – and your deposit may be adjusted accordingly.
It seems backwards that deposits and interest rates are increased for those who historically have had less money. Those with less are forced to pay more. If you choose to only pay the minimum monthly payments, If you choose to consolidate your debt, you need to understand that taking a seconactually cost you your home..
Debt Settlement Is Faster
The only faster way for someone having a financial hardship to pay off their debts faster than debt settlement is bankruptcy. For those wanting to avoid the stress, social stigma and intrusion of bankruptcy, debt settlement is the reasonable alternative. Typical debt settlement plans cam resolve debt in as little as three (3) years.
A debt management plan through a creditor-funded and creditor-controlled consumer credit counseling firm can take anywhere between five (5) to seven (7) years. A consolidation loan using your home equity or second mortgage does little to resolve your debt quickly. You have moved an unsecured debt with a secured one. Typical minimum payments on a consolidation loan, will typically take 15 to 30 years to pay off and cost you more than twice what you borrowed.
Debt Settlement Causes Less Stress
Dealing with bankruptcy’s social stigma can be very stressful. There are times when bankruptcy is the best choice, and you should consult with a bankruptcy attorney about your current situation. However, most people surveyed after filing bankruptcy said they would try to avoid it if put in the same situation.
When a debtor enrolls in a debt management program through a consumer credit counseling agency, the accounts enrolled with the program will say “Under Debt Management” or “CCC” and this notation is seen as a negative mark by those who look into at your credit report, such as a rental office or potential employer.
The stress of dealing with negative marks for the next five to seven years is something to consider. Remember, these agencies are funded by the same creditors from which you are seeking accommodation. Imagine the stress of offering your home as collateral against your unsecured debt. Your minimum payment will likely be the same or higher than what you are paying now. When missing payments means risking your home, the stress can be intolerable. Imagine being thrown from your home and seeking an apartment, knowing your credit score was destroyed. Your rental office will see your credit report and more than likely adjust your deposit to meet your high-risk credit classification.
An Alternative to Bankruptcy
Debt settlement is faster, cost you less and eases collection related stress. Fill out the form below. A highly trained Debt Consultant will contact you to discuss your specific situation and concerns. Once contacted, we will be in contact with you within 24 hours.
