Things to consider before debt settlement - Bills.com News

Bills.com News > Debthelp > Things to consider before debt settlement

Things to consider before debt settlement

Friday, Nov 6, 2009
By Lucy Sanderson

Some consumers may consider debt settlement when looking for a way to deal with their money problems. However, there are some things they should know before going forward.

A recent story from the Associated Press noted that debt settlement through a firm works by having the organization haggle over the total debt amount a consumer will owe while the consumer socks away an amount that will be used in the settlement.Once they strike an agreement with the lender, the consumer pays a lump sum.

The AP report states that debt settlement is often used for credit card debt. However, there are some issues involved with it. For example, creditors can still attempt to collect the debt from the consumer while the debt settlement company is in negotiations with the creditor to work out a deal.

"It’s not all roses even if you do get a settlement," the piece from the AP said. "It will be marked on your credit report for seven years and can hammer your credit score."

The
Federal Reserve is expected to release new numbers regarding revolving credit soon. In August, revolving credit, much of which is accounted for through credit card debt, dropped by an annual rate of 13.1 percent.


Recommended stories
• Mortgage refinance applications increase According to the latest weekly survey from the Mortgage Bankers Association, home refinance applications increased. Nov 05, 2009

• Time to retrench, consider mortgage refinancing The Mortgage Bankers Association's mortgage data reveals that loan rates are hovering around 5 percent. Oct 30, 2009

Resources
that save you money
• You might reduce your monthly payments by refinancing your mortgage. Get no-cost, online mortgage refinance quotes from up to four prequalified lenders.

• Buying a home? Get no-cost quotes online for competitive, fixed-rate mortgages from up to four providers.

• Reduce your debt up to 50%. Get matched with pre-qualified debt consolidation experts.

• Get a free credit report. Find a professional to correct your credit report. Apply for a new credit card. Visit the Bills.com Credit Card Center .

Also, make sure to get a free financial health check-up with Bills IQ!
Information provided by Bills.com is for general informational purposes only and is not be construed as legal, financial, bankruptcy, tax or other professional advice. Should you require more detailed information or specific professional advice tailored to your situation you should consult an attorney, financial planner or tax advisor.

While we believe all information provided by Bills.com to be accurate as of the date of its posting, we cannot ensure its accuracy. Use of this site and any information contained on or provided through this site is provided without any representations, warranties or guarantees. Bills.com is not responsible or liable for any decisions or actions anyone may take based on the information provided. Please see Terms of Use.