Sunday, 18 November 2018
Agent Resource Center
This Old House - Do-it-Yourself

Why Debt Settlement Can Be A Good Decision?

Written by Posted On Tuesday, 15 May 2018 01:50

Debt settlement has become a need of the hour for people because they have gradually developed the habit of covering their day to day expenses through credit cards. The irony is that people generally don’t manage their budget and their monthly earnings are less than their expenses. So over a period of time the people are left with debt that keeps on piling up every month because the income inflow is limited but the expenses are uncontrolled. This all makes the situation worst for most of the household and the creditors keep on calling for repayment of the dues.  

There are not many ways left for a person who is in debt because debt hampers credit ranking badly. So the person with debt cannot also opt for a personal loan to settle down previous dues to start fresh all over again. The only way to settle down debts is by having conversations with the creditors on regular basis and reaching to a settlement. There is literally no point in hiding away from creditors or not picking up their calls because if they find the person incapable of repaying the debts they can sue the person and that is a bigger mess and the person can be jailed also.    

This is the reason either the person starts to save money by putting break on his expenses or he should hire debt consolidation companies that will work as a negotiator between the debtor and creditor to reach to an agreement for a lump sum amount of the actual debt. This is generally done by a negotiation team that finds out loopholes and feasible ways to save the debtor from paying the whole debt.

But before opting for debt settlement you must understand that any debt consolidation company which tells you that your credit score will not get affected or your debt will be reduced to half or you will have to pay pennies on the dollar or your taxable income will not get affected or you will not have to communicate with your creditor or your creditor will stop calling you then you are getting mislead by the debt consolidation company.    

Debt settlement is generally a slow process where the negotiation team representing your debt on behalf of you opens up a trust account. This trust account is used by the negotiation team to negotiate with the creditors. In the meanwhile you have to deposit at least 50% of the debt in this trust account over a period of 24 to 60 months. So when you keep on depositing money in the trust account and debts slowly starts to lower down you will notice an increase in your credit rating. The negotiation team will carry on its negotiation till the last creditor agrees on a lump sum amount against its credit.

Therefore debt settlement is a very good way of getting rid of debt. But all this requires you to be very precise in spending your earnings because you have to save for the settlement anyhow. It is a good way to choose only if you can manage your monthly budget and save some amount every month.

Rate this item
(0 votes)

Agent Resource

How to capture your next prospect - click here

Realty Times TV

View More

Realty Times

From buying and selling advice for consumers to money-making tips for Agents, our content, updated daily, has made Realty Times® a must-read, and see, for anyone involved in Real Estate.