Information on Debt Settlement Option
What is your opinion on debt settlement and how does it affect your credit?
What is your opinion on debt settlement and how does it affect your credit?
Thanks for your question. Debt settlement, also called debt negotiation, is a form of online debt consolidation that cuts your total debt, sometimes over 50%, with lower monthly payments. While I know that there are several fly-by-night debt settlement operations on the internet, there are also several very good operations. Rather than making monthly payments to your creditors, these programs negotiate lump sum settlements with your creditors, frequently reducing your debts by 50% to 60% of your principal balances. These programs usually take only 2-3 years to complete, so this is a good option for many people to rid themselves of debt in a relatively speedy manner. In many cases they can also reduce your monthly payment toward your debt.
There is one major drawback to debt settlement programs, though?they will significantly damage your credit while in the program and for at least a year or two afterwards. It is important to keep in mind, that during the life of your debt settlement program, you are NOT paying your creditors. This means that a debt settlement solution of online debt consolidation will negatively impact your credit rating. Your credit rating will not be good, at a minimum, for the term of your debt settlement program. However, if one is currently unable to afford to pay their creditors, the hit on credit may be worth the benefit of ridding oneself of debt. Debt settlement is usually the fastest and cheapest way to debt freedom, with a low monthly payment, while avoiding Chapter 7 Bankruptcy. The trade-off here is a negative credit rating versus saving lots of money.
There are a variety of firms out there offering debt settlement and other forms of debt consolidation. Generally, I would make sure that any firm you choose is a member of the Better Business Bureau and get a sense for the quality of the organization (www.bbb.org).
Bills.com makes it easy for you to apply, by following this link: Debt Help Savings Quote
I hope this information helps you Find. Learn. Save.
Regards,
Bill
www.bills.com
Debt statistics
If you are struggling with debt, you are not alone. According to the NY Federal Reserve total household debt as of Quarter Q4 2023 was $17.503 trillion. Student loan debt was $1.601 trillion and credit card debt was $1.129 trillion.
According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.
The amount of debt and debt in collections vary by state. For example, in North Carolina, 33% have any kind of debt in collections and the median debt in collections is $1570. Medical debt is common and 20% have that in collections. The median medical debt in collections is $742.
Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.
