If you’re asking yourself, “What are the facts about debt settlement? “, keep reading. There are a number of things you should be aware of and at least familiar with before entering into any kind of debt relief program. The more familiar you are with the subject, the better decisions you’ll make will be.
First, what exactly is debt settlement? Debt settlement is a negotiation entered into with your unsecured creditors. Essentially, common creditors agree to settle a portion of the outstanding debt: usually around 50%, though figures can range widely when negotiations are done. Once settlements are reached, the terms are typically set in writing and posted for everyone to see. Once all parties approve of the settlement, this is a settled debt and your credit score will reflect as such.
With a debt settlement, you have the option of going bankrupt or keeping your name on your credit report. Going bankrupt is obviously not something that anyone would recommend, but if you have other debts that seem impossible to pay and you don’t have another source of income coming in, going bankrupt might be your only option. But it isn’t a positive move when you take this route because you are essentially admitting to creditors that you have no way of paying them back. You’ll also suffer some long term damage to your credit score as a result of going bankrupt, which will follow you around until the debts you had consolidated as well as the debts you still have left all become listed on your credit report.
Conversely, once you’ve reached an agreement with your creditors, you won’t have to worry about going bankrupt. In fact, you will be able to pay off your debts much faster by simply paying them in full. By taking out a loan, you will have already stretched your money as far as possible, so it will be easier to pay off your debts. And if you’re already neck-deep in debts, getting out of it altogether can be even more important. After all, you don’t want to start off with more debt than you had to work with!
There is one other advantage to debt settlement that is often overlooked. When you consolidate all of your debts into one, you have one monthly payment to make to one creditor. This makes it easier for you to budget your money and get a handle on your finances. Many people don’t realize how easy it is to do so with debt consolidation.
While you should definitely think about debt consolidation and its pros and cons, you shouldn’t completely rule out bankruptcy. If you meet with a financial advisor who has experience working with people who are going through this process, he or she may be able to help you decide whether or not you should file for bankruptcy or if a debt settlement would be a better option. It’s also important to note that the financial advisor working with your audience members may be able to refer you to credit-counseling agencies that specialize in bankruptcy alternatives.
Some small businesses believe that filing for bankruptcy is their only option. While it’s true that filing for bankruptcy will undoubtedly wipe out some of your debts, it should also be noted that it could knock down any and all personal assets you own. The reason why this is such a big concern is because many entrepreneurs feel that their business is not worth the risk of a potential bankruptcy filing. A much better alternative that should be seriously considered by your audience members is debt solutions.
Debt solution can be a real life saver for many struggling businesses. There are tons of debt settlement companies out there who are trained to help. These companies have been providing help for the small business owner for years, and they know what works and what doesn’t when it comes to working with credit repair agencies. These debt solution experts don’t take a fee for their services, which means you don’t need to invest any money upfront to receive help with your current financial situation. All you need to do is ask for assistance and get started rebuilding your financial future.