A debt settlement offer can be a useful tool in your financial arsenal. If you are facing mounting credit card bills and can’t seem to find a way out, you may be considering a debt settlement. Debt settlement is a form of negotiation that allows you to pay less than what you owe and receive your money back in a lump sum. You can also choose to negotiate a payment plan to pay off your debt.
The best part about a debt settlement offer is that the process will only take a few months, or even weeks if you work with a reputable settlement company. Once you have paid your debt off, your creditor will release you from the remaining balance. In some cases, your creditor will even be willing to reduce your payments. It is always a good idea to make sure your creditor knows that you are looking to settle your debt.
The first step is to decide whether you want to negotiate directly with your creditor or work with a debt settlement company. Ideally, you should use a reputable settlement company since you are unlikely to get your money back if you go through a low-baller. But if you are a DIY type, you can still try to negotiate with your creditors.
Debt settlement companies typically charge a pretty penny to help you pay off your debt, but they can be worth the price if you are smart about your selection. While you are at it, be sure to look for a legitimate company that uses the FDCPA to protect you from harassment and scams. Using a settlement company can save you a bundle of money over time, so you should check into their credentials before making your final decision.
As with most things, there are pros and cons to using a debt settlement company. On the positive side, you are likely to get your money back, and your credit score will be improved. However, the process can be a long and drawn out affair. For example, your creditor might require you to make a large down payment before he will consider the offer.
On the downside, your credit score might suffer if you have a large balance and miss a few payments. This is because a missed payment will show up on your credit report for a good six years or more. Fortunately, you can avoid this scenario by accepting a payment arrangement that lets you make small monthly payments and allows you to build a hefty amount of cash in the interim.
However, you must be careful to avoid the pitfalls of debt settlement, which include not making timely payments and getting a poor credit rating. There is also the possibility that your debt will be sold off in the bargain, which can be a bad move if you are already underwater. Lastly, you must be able to prove that you have a serious financial woe. To do this, you will need to prove that you have a job or that you can afford to pay the settlement in full.
Debt Settlement Offer – How to Negotiate a Debt Settlement Offer was first seen on Debt Worries