The Facts Surrounding Debt Settlement Solutions
There are a great many ads circulating promoting debt settlement solutions
. The ads sound very promising. Those that may have a large amount of debt that is suffocating them might be able to find a reprieve through settling for pennies on the dollar. But, is all of this true or are there any strings attached to the process of debt settlement?
Here is the short answer: debt settlement solutions are legitimate and are frequently employed. However, debt settlement is not as easy to engage in as some of these advertisements make the process sound. If you were to take the commercials for these settlements literally, you would be led to believe anyone with a lot of credit card debt can settle on the debt. This is not an accurate assessment.
The credit card companies are generally not going to settle debts for someone that is making $100,000 a year and owes $10,000 and never missed a payment and has excellent credit. Really, why should the credit card company settle such a debt? Debt settlement solutions are generally reserved for those that cannot pay their debts and may be looking towards potentially filing for bankruptcy.
There are certain criteria that need to be met prior to seriously seeking effective options for debt settlement. Here is a short look at such criteria:
You need to have debt issues with unsecured debt. You cannot settle on secured debts such as mortgages. This is a common misunderstanding people possess and they may assume that any and all debt can be settled. That is not the case.
You unsecured debt generally has to be rather substantial in order to be seriously considered for debt settlement. Generally, debts of $10,000 or more would be the threshold. That said, it is possible for lower amounts to be settled and this has been done in the past. However, your financial situations would need to be dire to settle a very low credit card balance. That brings us to our next point...
A dire financial situation is commonly required for you to seriously seek debt settlement solutions. You cannot seek out debt settlement for mere convenience. Well, you can seek them out but you may not find it very likely that you are approved. The main reason that the credit card companies will be willing to settle is they would prefer to avoid seeing a debtor venture into bankruptcy. Once in bankruptcy, it could prove next to impossible for the unsecured lenders to get the payments owed to them. As a result, they will opt to agree to a partial settlement. This can be seen as the lenders protecting their own assets and not so much trying to help the debtor. That said, the end result might very well lead to a solution to the debtor's woes.
Yes, there are more than a few myths about debt settlement solutions out there. However, once you dispel the myths you will discover that such settlement solutions can yield the effective desired outcome of getting out of a deep amount of debt.
by: Jacque Crook
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