subject: Debt Settlement Poses Serious Risks [print this page] If one were to rely solely on advertising claims as a source of information, then it would be difficult to justify the use of any other unsecured debt solution besides debt settlement. According to these claims, the balances on the debt will be dramatically reduced through a negotiation process and will leave the consumer with just a fraction of the original balances owed, whereupon they can pay off the debt quickly and wash their hands of the situation completely. While this rosy-sounding scenario may have some basis in truth for a certain minority of consumers, the truth is that even these fortunate ones referred to are subject to negative consequences that conveniently are not detailed in the advertising. And for those unlucky ones whose negotiation process does not work out as was planned, the actual results of the debt settlement process can cast the solution in an entirely different and unattractive light.
To be specific about the dark side of debt settlement that is much less readily apparent, the "successful" cases of debt settlement will still result in the consumer experiencing severe credit damage. The reason for this damage is that in order for the settlement process to stand any chance of being successful, the consumer is required to completely stop making any more payments to their creditors until a settlement has been reached with them. The credit damage will necessarily follow from these missed payments. It's not hard to understand why this vitally important fact is left out of the optomistic picture presented by the debt settlement companies in their advertising. Worse still, there are those whose settlement process is not "successful". In addition to not getting good settlement offers from the creditors, consumers can also be exposed to the possibility of wage garnishments, judgements and having their accounts sent to collection as a result of the debt settlement process. Perhaps a less risky solution to an unsecured debt problem is what many consumers actually need, and for those so inclined a better solution might be credit counseling.
Debt Settlement Poses Serious Risks
By: Jackson Roberts
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