Thinking about whether debt settlement is the solution to your financial problems? Then you should be aware of some potential pitfalls. Most information about debt settlement is provided by a debt settlement attorney with an interest in selling you a service and that always comes with a risk of the information being misleading. This article will tell you the full story and when you are done reading you will be in a better position to judge if debt settlement is for you or not.
Debt settlement is often pushed as a one size fit all solution, but the truth is that it only is a good idea to a minority of the millions in debt. First of all it will damage your credit score, because you have to be at lest four month behind on your payments before the credit card companies will even talk to you about settlement. If you make the minimum payments you are making them good money and it’s not until the face the risk of you going bankrupt they will give that up to a lesser deal. So if possible it’s always better to pay off the full debt one way or another. And bankruptcy might be a better solution for those that are not able to do so.
One reason bankruptcy might be preferable is that it eliminates the opportunity for the credit card companies to sue you. If you hire a debt settlement attorney to help you through the process he is not allowed to give you legal help and represent you in court in case you get sued. And in most cases he will just drop your case if that happens: Which means you lose all the money you paid for his service without getting anything out of it.
With those few warnings in mind debt settlement might still be the best solution for you. However I highly recommend considering other options before you make up your mind. And knowing some of the dangers should help you come to a decision you won’t regret.
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