If you are faced with more debt than you can handle, debt settlement may be an option for you. Debt settlement can significantly reduce the amount of money you owe creditors and get you back to a financially sound life.
What is Debt Settlement?
Debt Settlement is when a lender or creditor forgives a portion of the balance you owe them, which can be up to 60% of the balance. Typically people either pay the creditor in a lump sum payment or in monthly payments. The types of debts you can settle include credit cards, personal loans, medical bills and installment loans.
How Do I Get Debt Settlement?
There are two ways in which to settle your debt with creditors. First, you can call them yourself and try to negotiate a debt settlement. Second, you can hire a professional like Credit and Debt Management of America (www.cadmoa.com) to settle your debts for you. The benefit of hiring a professional is they know the creditors, what they will settle for and how to push them to a settlement. Because creditors don’t have to offer debt settlement, it is always good to have an experienced company get you the best results. Historically, people who use a professional rather than themselves for debt settlement saved more money.
What are the Pros and Cons of Debt Settlement?
Debt settlement definitely comes with its costs and benefits. So make sure you weigh the pros and cons before making a decision. You can also contact a professional for a free consultation, which is a good idea.
PROS
CONS
√ You pay your creditors less money
√ You can avoid bankruptcy which will help you rebuild your credit much faster
√ Pesky collection calls will stop
√ Your credit will be negatively affected and you will have to rebuild it
√ The settled debt – only the portion the creditor waived - is considered income and taxable
Are there any Alternatives to Debt Settlement?
There are a few alternatives to debt settlement. You can continue to pay your monthly payments and pay off your debt in 10-20 years or you can file for bankruptcy and have issue with credit for the next 10 years. However, the best way to rebuild you credit and save on the money you owe may be Debt Settlement.
Making minimum payments on a $20,000 credit card debt at 20% interest can take decades to pay off. CDMA can assist you in settling your debt in 36 months or less.
