The Debt Settlement Solution - Will It Work For You?
Debt settlement is a debt relief option that allows you to negotiate with your lender
to pay your debt off for a lesser amount than what is actually owed on it. This option for getting out of debt is used when the account holder will never be able to pay the account off in full. It is not a pretty way of handling your debt, but it is effective and has helped many people avoid bankruptcy and put an end to the collection process.
You have to realize that this will impact your credit negatively, but if you have not made payments in a while the damage has already been done. At this point, it is best to get it resolved as much as possible and as quickly as you can. And if you cannot pay the balance in full, settling the debt is your next best option. The sooner you can get out from under debt the sooner you can begin the credit repair process and move forward with your life. This will also avoid the lender taking legal action for nonpayment.
Setting a debt is something that is done through the lender and should be done by you and not by a service. Debt settlement services are expensive and not all of these companies are reputable. It is as simple as calling the lender and asking to settle your debt. If your debt has gone more than 6 months without a payment, they will probably be anxious to settle. If you are current on your payments, they are probably not going to want to discuss a settlement with you at that time.
Many lenders will settle for 50% of what is owed and some will be willing to take even less. They have already written the debt off and for some effort on your part they will be willing to forgive a certain amount of the debt and let the rest go. All this solution is not what they want, it is better than nothing and will allow you to move one.
Debt negotiation can be the answer to debt that is long past due and haunting you. It is important to know that your credit will be affected by paying off a loan for less than what is owed. Also any part of a loan that is forgiven is taxable. These are some things you should consider before you decide this is the debt relief option for you.