Is it worth it to settle debt?

Date Posted: September 6, 2022
By: Maggie Marques

Is it worth it to settle a debt? If you ask yourself if it is worth settling debt, it can be yes or no. As always, paying the debt in full is the best but if your financial circumstances don’t warrant it, settling your debt is the better way to go. It may damage your credit report, but it is better than running away from your obligations.

Creditors know that finding the word “settled” in your credit report negatively reflects your financial health. The word means that your lender has agreed to accept an amount lesser than what you, the borrower, originally owe them.

What are the repercussions of having a negative perception of your credit report? Some accounts will remain in your credit report for the next seven years until they are finally closed. Bad accounts may still be reflected, but lenders will also see how much you are trying to improve your score. Given this reality, you must keep paying on time and improving your credit score by always honoring your obligations.

If you think that debt settlement is something you would consider, there are debt settlement companies who can work on this on your behalf. Expect to pay for fees as they work on your settlement and also expect a negative effect on your credit score.

The bottom line is that you need to start cleaning up your credit history and credit rating. What has been done can’t be undone, so settling your debt may not be the best option, but it is better than disregarding it. It will take time, but it will be worthwhile in the end. Get help if you must, lose a few years in a good credit score – whatever it takes, start doing something about it now. Is it worth it to settle a debt? Yes!

 

 

 

 

 

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