Debt
settlement is a unique approach to debt consolidation. Debt
settlement companies will work with you to plan a monthly payment
schedule that will fit within your budget, and will develop a
timeline of when they expect to eliminate your debt. Since the
programs vary based on individual situations, the final outcome
differs from person to person. Your 'hardship', or the reason you
need to consolidate, will determine your settlement.
Most reputable settlement companies will base your payment on a 50%
settlement plus any fees they may charge. If you make your payments
consistently, it is reasonable to assume you will be debt free at
the end of your individual program. Most debt settlement programs
are 24 to 36 months in length, dependent upon the budget you and
your advisor have decided upon.
If you choose debt settlement, all of your accounts will fall behind
and eventually may charge off. Once your accounts are settled,
creditors will report the debt as settled with a $0 balance, and you
are no longer liable for any forgiven amounts. The agency you work
with does not manage your money for you, so they do not have to
report to the credit bureaus.
No one
will know that you are using debt settlement services except for the agency
and the creditors it handles.
While debt settlement initially will have a negative impact on your
credit, it also will save you the most money over time compared to
other methods of consolidation. It is the quickest route to becoming
debt free. |
