Although many are aware of the benefits of debt settlement, a majority of borrowers fail to consider debt settlement as a viable solution when it comes to dealing with their debts. A lot of this has to do with the myths that surround debt settlement. Here is something that can help educate the consumers about the top benefits of debt settlement.
Debt Settlement Helps Avoid Bankruptcy
Bankruptcy could be a debt solution; but it is going to follow you through the rest of your life, whether you like it or not. It is going to stay on your credit report for a period of 10 years, making it difficult for you to get further loans or even credit cards. The worst part is that you could even lose your job. The best way to avoid bankruptcy is to choose debt settlement. If any of the debt settlement agencies have already contacted you through debt settlement leads, make sure you find out how it can be better than choosing bankruptcy.
In case of debt settlement, you are paying back your creditors and getting rid of your debts, even if you are paying only a percentage of your outstanding balance. The debt settlement agency that comes to you through debt settlement leads, will negotiate with your creditors and make them settle your debts for less than what you owe. Unlike the filing of a bankruptcy, debt settlement is not going to sit on your credit report for seven years. If the debt settlement company that comes to you via debt settlement leads manages to convince your creditors not to report your settlement, it won’t even have an impact on your credit score.
Debt Settlement helps you get debt-free
Debt settlement is an option that you need to choose if you have trouble paying back your debts. It will help you find relief from the overwhelming debts in a shorter span of time, and at a lower cost. Here, instead of paying back your creditors on a monthly basis, you start making payments to the debt settlement agency that contacts you through debt settlement leads.
The debt settlement agency accumulates these payments into a lump sum and then offers it as a settlement offer to your creditors. The only other option your creditors may have is bankruptcy, where they get hardly anything from you. If you file Chapter 7 bankruptcy, they may not get anything at all. So, it is not exactly difficult to make your creditors accept your settlement offer.
Debt settlement helps you repay your debts in less time
If you are stuck to your original repayment schedule it might take decades for you to pay back your debt. Even if you choose an option such as credit counseling, debt consolidation, or Chapter 13 bankruptcy you will have to wait for about three to five years for your debt to be repaid completely. With a good debt settlement program, you should be able to repay your debts within a period of two to four years.
For sure the benefits of debt settlement make it a better option to choose when you are finding it difficult to repay your debts. However, it doesn’t come without negative consequences. For starters, there is no guarantee that your creditors will accept your settlement offers. Meanwhile, your credit score might start deteriorating. Even if your debt gets settled for less, you may have to pay taxes on the canceled portion of the debt. So before you sign up with any debt settlement agency that gets in touch with you through debt settlement leads, make sure you weigh the benefits of debt settlement to its risks and then make your decision.