Will debt settlement affect your quality of life?
Are you struggling with credit card debt and unable to pay monthly payments
? This is going to be even hard as the minimum payments had doubled since 2009 December 1st during this economic crisis, leaving Americans in horrible financial position. With this if you think your quality of life is getting affected by your credit card debt and seeking bankruptcy to get rid of debt, then many experts suggest debt settlement as best option to pay off the debt with ease.
How this debt settlement works? Debt settlement is a process where the debt settlement representative will evaluate your current level of unsecured debt and ask you stay delinquent for at least for 3 to 6 months period because paying monthly payments on time will not make creditors know your hardship. Debt settlement works by letting the creditor know your hardship and letting them know that there is chance of defaulting on debt. As the overdue starts to build up, creditors start to fear of not getting total money in case the consumer filed bankruptcy and be more willing to negotiate partial amount deductions. The amount forgiven will lot depend on the skills of the representative dealing with your case. For more information on debt consolidation visit
http://creditcardbankruptcysolutions.com for helpon debt consolidation. Meanwhile he asks you to deposit certain amount every month in savings account. After collecting certain amount in bank, the debt settlement representative will start negotiating with creditors and put his efforts and skills to reduce the amount you owe.
Yes, debt settlement is definitely going to affect your quality of life. The first thing that gets affected with debt settlement is your credit score. The credit score affects because of the delinquency caused on your debt. Any delinquent payments will be reported to credit reporting agencies by the creditors and listing by multiple creditors will impact credit score. However, the effect on your credit score will not be as bad as bankruptcy because the delinquent payments will be on credit report for only 1 to 2 years after the debt is paid in full where the bankruptcy will stay for more than 7 years. Therefore, debt settlement is considered as a better option to eliminate debt.
The impact of the debt settlement will lot depend on the personal financial status of the individual as how many lines of credit are opened and how well the credit score is maintained till date etc. if you were to pay bill on time every month till now, your credit score will be relatively high. But there is scenarios where the borrowers tend to maintain high credit score but their finance is remain fragile because they borrow from one creditor to pay another in order to maintain payments.
Individuals whose accounts are already delinquent will likely see their credit score impacted and it is not likely to impact further with debt settlement and tend to improve after all the accounts are settled and remain zero balance.
Will debt settlement affect your quality of life?
By: Jack Bronson
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