When you ask many of the experts they say that debt settlement is rarely ever the solution to the problem. This may have to do with the fact that there are some settlement companies who are looking to take advantage of individuals who are down on their luck financially. However, there are some honest debt settlement companies out there that do want to help. For some consumers, there are a few benefits to utilizing debt settlement.
Avoiding Bankruptcy
The biggest reason that many consumers decide to go the debt settlement route is to avoid filing for bankruptcy. Bankruptcy is something that will follow you in the financial sense, for the rest of your life. There are a number of job, loan, and credit card applications that will ask you if you have ever filed for bankruptcy. It remains on your credit report for 10 years. You should never lie about this on any application as it is considered to be a form of fraud.
If you have assistance in settling your current debts with the people who you owe money to, it will remain on your credit report for up to 7 years. Settlement can be a short-term solution to a much longer problem.
Relief from your Debts
The goal you are trying to achieve when you are settling your debts with creditors is overall relief from those debts. You can get creditors to stop calling you as it is stated on your credit report that the debt is settled. Creditors would prefer that you settle your debts because ultimately they will get more of the money back from you than from bankruptcy. It also gives you the ability to pay off your debts at a faster rate.
Not all creditors will agree to settle the debt that you owe. However, if you talk to a professional who specializes in debt settlement or credit card debt reduction in Brooklyn, NY area, there might be some relief available to you.
Conclusion
Regardless of what you decide to do regarding your past and current debts you should always talk to a professional before making a decision. Both bankruptcy and debt settlement can be very tricky so it is important that it is done the right way. Talk to a professional about what options are available to you and how you can start paying off your credit card debts today.
