Discouraged? Debt settlement may be worth it if you’re overwhelmed with debt?

Date Posted: January 30, 2022
By: Maggie Marques

Is Debt Settlement worth it? YES! But before you go and take this option, let’s understand how it works, if it is worth it, and what are the repercussions you need to prepare for if you do go down the road towards debt settlement.

Debt settlement happens when you talk to your creditors and ask them to pay them what you owe less than the total amount. You can work on your debt settlement, or you can hire somebody to do it for you. Do you need to hire a lawyer or a debt settlement company to do it for you? Well, if you have the time and the know-how, you can save money by doing it yourself. But if this is something new for you and you can’t spare time for it, as it is a long process, then hiring somebody to do it for you is your best solution.

When is debt settlement worth it? Let’s understand the pros and cons of debt settlement and see if it is a good fit for your needs or not.

The Pros:
1. If the debtor agrees to accept your payment of at least 30% of what you owe them originally, then going for it may be a good option! Some debtors would even go as low as a 50% settlement, so make sure that you start with a big chunk off when you make your offer.

2. If bankruptcy is the ONLY way out, then go ahead and try debt settlement first. Between the two choices, the lesser evil with be the latter.

3. If the stress of facing the debt collectors has been making you endure restless nights trying to come up with a solution to your problems is too much to bear, then debt settlement can be the way to go.

The Cons:
1. Your credit score will be negatively affected. Even if you don’t owe your creditors anymore, it will reflect on your credit report that you settled and that the creditor accepted your repayment even if it was not paid in full.

2. Debt settlement will cost you in charges. Different companies will offer a different rate but be prepared to pay.

3. Debt settlement is not 100% guaranteed. The last say will always be your creditor if they accept your offer or not.

Is debt settlement a consideration now? Let us know how we can help you get through this financial journey.

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