In many people's point of view, when they have excessive debt
, debt settlement will be an ideal way to get them out of debt. However, this financial solution can turn out to be bad in certain situations. Have you ever thought of them? Here are some facts you need to know. Do you know that your credit score will be reduced for 45-120 points whenever you do a settlement? Are you aware that the information related to your settlement will be remained on your credit report for 7 years? If you are looking for favorable terms for your future loans, it will be quite hard. You won't be able to get credit easily. You may be able to reduce a big sum of your debt. However, your forgiven debt is taxable. You don't actually save money. In some circumstances, even you have settled your debt, the creditors or debt collection agencies will still try to collect the balance from you. How can they do that? They can get you to pay in full if you don't have proper documentation to prove that you have settled the outstanding as agreed. Don't expect that it is easy to bargain with your creditors to reduce your debt. You need time and techniques to negotiate with them. The creditors will only negotiate with you if your account is 90 days past due. Are you willing to ruin your credit just to fulfill this condition? Settling debt on your own is economical. What if you are not able to handle it on your own? You may need to look for debt settlement companies. Are you financially prepared to pay the high service fee? In short, before you make your final decision, try to consider all the bad points. Find out the effects and determine whether it is still worthwhile opting for settlement.