What are Some of the Benefits of Debt Settlement You Will Get?
Debt settlement allows you to settle your debt for a significantly lower amount compared to what you originally owed. People who resort to debt settlement are usually those who are facing difficult financial challenges and are going into bankruptcy. Many banks are willing to settle for a lower amount because they know they may never get paid back any amount if they reject the offer. This is considering the fact that creditors won’t get much from you regardless of whether you file a chapter 13 bankruptcy or chapter 7 bankruptcy.
Credit card debt settlement is the solution for those who don’t want to end up filing for bankruptcy. The bankruptcy record will stay on your credit report for 10 years. Having a bankruptcy record on your credit report will make it very difficult for you to apply for loans and jobs. Once the debt is fully paid, it will record on your credit report as settled. The debt settlement record will stay on your credit report for 7 years. After 7 years, the record will be removed from your credit report so that no one knows about your debt settlement history.
In debt settlement, you will be asked to contribute a specified amount of money into a savings account every month. In the meantime, the debt settlement company will contact the creditor and negotiate for a settlement amount on your behalf. Normally, they will get the debt settlement company to accept a 35 – 60% settlement rate. Often, they are able to help you settle the debt for less than 50%, which will help you to save a huge amount of money especially if you owe a large sum of debt. With a good debt settlement program, you can expect to clear off your debt within a period of 2 – 4 years. This is a much shorter repayment period, compared to if you pay back your debt by the original interest rate.
Debt settlement is suitable for people who suffer from bad or poor credit. At least, with debt settlement, you can settle your debt without worrying about the credit card companies reporting your late payment to the credit bureau every time you fail to make payment on time. If you ignore your debt and not repay every month, the bank will hire a debt collection company to chase after you. Therefore, getting a debt settlement should be your goal if you are serious about wanting to settle your debt quickly.