What Are the Pros and Cons of Using Debt Settlement?
If you have a lot of debt, you may want to consider commonly available solutions such as debt negotiation, which is considered an alternative to bankruptcy and is usually only available to those with several years on their hands. It uses a unique approach to handling debt in order to give you the best possible chance of getting control of your finances and becoming completely debt-free.
What you will have to see is the amount you are dealing with versus the potential amount you can save. Nutshell, the way it works is twin civilian candles and you have two different goals.
- As part of the debt negotiation process, your attorney will explain the law, what the process is about, what you can afford, and what you stand to lose by not having this handled. Cash saved is money gained.
- At the end of the day, if you determine that you actually stand to save a substantial amount of money, you will make a decision to proceed. Clients are advised to only proceed when they are almost certain that they will save more than what it would cost to proceed. This is generally for straight bankruptcy. Debt negotiation is for those who have debt but whose debt balance would actually demonstrate some financial difficulty being reduced by successful negotiation.
Using this process will appear on your credit history, possibly influence lender decisions to deny you credit in the future, and indeed could affect your ability to do things like start a business, buy a home, or even take out a line of credit for a car. Simply put, debt negotiation is for people who legitimately need help managing their debt.
More than likely, regardless of getting a debt settlement, people who go into this typically with high levels of unsecured debt and who have mortgages and/or car loans are not teetering on the brink of filing bankruptcy face to face with their creditors, are probably are already facing some mounting expenses as a consequence of their mounting debt, and see a debt settlement as a means of getting out from under an overwhelming burden. Others are beginning to consider it for lack of a better choice.
With government money being given away to such massive numbers as bailouts, and with creditors wanting to eliminate the debt that they may not be getting paid back one bit, they are entering into a negotiation process with settlement companies in order to get at least some of the money owed. Your attorney may determine that this is your best opportunity and as such, can recommend that you its smart to proceed when you’ve got an attorney on your side.
The downside to using a debt relief network like this is the acceptance of higher costs. These fees are generally rather high and should not be taken on without careful consideration. Currently, the industry regulator, the Federal Trade Commission, is making moves to limit the number of firms that are operating as a debt relief industry to legitimately operate in their state. More resources gives the potential of a very bad outcome for consumers.
Those people who are lucky enough to find the right company will find that the fees are not all that high, and the services can be reasonable. The key to choosing the right company is doing a little bit of homework before picking because its not that uncommon for a company to go out of business.
