When Is Debt Settlement A Bad Idea


when is death settlement a bad idea have you ever wondered when debt settlement is a bad idea this type of debt solution occurs when you have defaulted on your payments for many months in the credit industry not paying your dues is a big no-no creditors will penalize you for it and when you reach the six-month mark your debt will be charged off and sent to a debt collector by that time your credit score would have gone down significantly in the debt settlement process falling behind on your bills actually helps your negotiating situation it demonstrates that you are in a severe financial situation and need help or else you will be forced to file bankruptcy in most cases consumers going for debt settlement usually are behind on their bills either due to a job loss medical bills or recent divorce they all need the debt reduction that it offers the only way the reduction can happen is when you convince the creditor that you can only pay a portion of what you owe nothing else anything beyond what you can afford will have to be forgiven in the best of scenarios this is the end result of debt settlement unfortunately not everyone is suited to use debt settlement as their debt solution there are signs that will tell you that this is a bad idea for your specific financial situation first of all if you were not in a real financial crisis your creditors can see through that they will see if you are still making payments to your other credit accounts and that will raise their suspicions they will think that if you can afford to pay the other accounts you can afford to pay your debt with them besides no legitimate debt settlement company will represent you if you are not in a real financial crisis another sign that debt settlement is the wrong debt relief program is when you need your credit score to be in good condition people who need their credit score intact to buy a house or get a car loan in the near future cannot use this because as mentioned the missed payments can lower one score you can seriously sabotage your credit ranking this way lastly debt settlement can only accept certain debts so if you have mostly secured loans tax debt or student loans you must seek other options to solve your financial problems this debt relief program can only work on unsecured credit card debt medical bills utility bills and other personal loans if you do not have the right debt no debt settlement company will be able to represent you if you are sure that debt settlement is the right debt solution you need to choose if you will hire a professional to help you out or do it yourself you can perform your own debt negotiation if you want to that will help you save on the service fee however you have to know that DIY debt settlement can be tough and intimidating make sure you have what it takes to complete the process of the negotiation otherwise you may be better off with the help of a debt professional

Read More: How Debt Mediation Gets You Out Of Debt

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