Is Debt Settlement
Effective?
Debt settlement is the act of paying less on a bill that you owe
and the company writing off the remainder of the debt. There are
two different schools of thought on how good or bad debt
settlement is for you – some say it is a bad idea while others
since its praises.
Debt settlement is definitely one way of reducing or eliminating
credit card debt. However, many people feel that you are better
off declaring bankruptcy instead of this method. They say that
if you are going to do a debt settlement, the company is still
going to report it as a bad debt on your credit and you have to
live with that for seven to ten years. Some say it is as bad as
going bankrupt, except worse because you have to still pay money
back. They say that you should think about debt consolidation
because it gets you a lower monthly payment, and does not hurt
your credit.
Others say that it is a great way to get your feet back under
you without living with the idea of a bankruptcy for the rest of
your life. They say that people simply cannot afford the debt
that they have and by settling it for a lesser amount it enables
them to get financially secure again and it lets the borrower
pay back some of what they owe at the same time. This method is
really a great way to handle your debt if you are between a rock
and a bankruptcy and just can’t bear the thought of it.
The fact of the matter is that your credit is going to take a
hit either way. If you do a debt consolidation it will help your
credit the most, while settlement will definitely hurt it.
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