Getting rid of your debts, without having to pay them in full might seem like the perfect option. Many debt settlement companies that come through debt settlement leads might even promise to make this happen for you. But debt settlement can have an impact on your credit score, making it difficult for you to avail further credit for quite some time. The question is are you ready for this?
With a little bit of research, you can find many ways to deal with your debts. You can try adding in another source of income that can put you in a better position to clear your debts.
You could cut down your expenses and save more to pay back your debts.
You can get in touch with a debt consolidation company to pay back all your debts for you.
You could even use the equity you may have built on your home to get rid of your debts.
But when none of these seem possible, your best bet would be to go with the debt settlement company that contacted you through debt settlement leads.
Here are a few scenarios when debt settlement might make the perfect sense, despite the effect that it can have on your credit score:
Your financial situation is unlikely to improve
Debt settlement might seem an ideal option when your financial situation is not likely to improve. You might have lost your job due to a recession or a disability. There could be a bad divorce that might have left you with hardly anything. You might have lost the only support that was holding you upright financially. In any case, it might seem impossible for you to clear your debts in full. This is where a debt settlement company comes into the picture. A debt settlement company that contacts prospects through debt settlement leads is usually aware of all of the right techniques that can help in negotiating with the creditor and convincing him to agree to settle the debts for less than what is actually owed. Such help can mean a lot when you know your financial situation is not going to improve any time in the near future.
Filing for bankruptcy seems like the only alternative
When you are drowned in debts and need to make a choice between living your life comfortably and paying back your debts, filing for bankruptcy might seem like the only option. But there is an alternative – debt settlement. Get in touch with a debt settlement company that might come to you via debt settlement leads and discuss your problems with their experts. They might ask you to stop making your debt payments and instead start saving whatever you can. Once these savings reach a particular amount the debt settlement company will contact your creditor and negotiate with him on your behalf, to accept the lump sum amount and settle your debt in full. If the creditor is convinced that this is the only way he can get his money back, there are high chances that he will agree to settle your debt for less.
Debt settlement can help you get free of your debts within a period of two to three years. You will have to pay some fees to the debt settlement company that came to you through debt settlement leads. You might also have to pay tax for the amount that is forgiven. There might be a negative impact on your credit score. Yet, at times this could seem like the only way to help you come out of your difficulties. Think of it as the start of a new life.