Debt settlement is one of those methods that you should always avoid when you are trying to get out of debt. It is an option but then a really bad one. If you can avoid it then you should do that by all means. Basically this process will take a lot of your energy and it will require professional help both financially and legally. Yes, you will need to get a lawyer in order to settle your debt. Still it is better than taking up a bankruptcy case in order to get out of debt.
Basically, debt settlement involves agreeing with your creditor to pay him/her less than what you owe them. It is more like forcing them to give you a discount that they do not want to give. Well, of course they will not be happy about it but then as you probably know everything can be negotiated. This is one of those truths in business that you should always keep in mind. You can negotiate with your creditors to take something lower than what you actually owe to them.
What are the Effects?
The thing about debt settlement is that it affects your credit score significantly. Aside from this everything else about the process is good. There are better options that you can consider like debt management. It will solve your dilemma more effortlessly. Since you do not want to struggle with a tainted credit report you might want to opt for something less drastic.
Before you go for debt settlement you should make sure that you see a credit counselor. Credit counseling is very healthy not only for your physical state of mind but also for your bank account. The credit counsellor will present you with a bunch of options that you can consider. When you check out the debt settlement reviews that are available online you will discover that it is a method that works for some people but not for everyone. In the same way debt management will not be a good option for everyone. This is why it is important to get in touch with a credit counselor.
What to do
If you opt for debt settlement or just about any other debt relief method you should make sure that you check out for several things. For starters you should keep communication with your creditors open. There is nothing more annoying like trying to get in touch with someone who owes you money only for them to ignore you. Do not ignore their calls or their letters.
Secondly, in the event that you should not wait until your account has been charged off. Accounts are usually charged off if the payment is late by six months. This will have a negative impact on the debt settlement process. Negotiations will not be as easy.
Aside from the credit counselor, you should also get in touch with a legal professional for their counsel as well. It will make the process easier and less hefty on you. Basically, debt settlement works in certain situations and not all; always seek professional counsel.