Debt Decision - Debt Settlement Programs

Debt Settlement Programs

When you're in debt, you want to get out in the fastest way possible. One of the fastest ways is debt settlement, but it may not be the best.

Settling Up

That's what debt settlement programs are all about right? Settling your debt? Kind of, but that's not really how debt settlement programs work. First you contact a debt settlement company. Then they contact your creditors and negotiate, negotiate, negotiate. They can get you reductions in your balances of 60-80%. That's what makes debt settlement programs so attractive. However, can you really feel good about not having to pay back everything you spent? Because that's essentially what you're doing. Imagine if you were your creditor. On the one hand, getting part of it back is better than getting nothing at all. But if they're going to write off that much of your debt, they're going to want the remaining balance in full immediately? So do you have that kind of cash? If so, go for it. But bear in mind this will have a negative effect on your credit record for the next 7-10 years. There are options in repayment however. Some debt settlement companies will agree to pay the lower balance for you, then you pay them over a period of time that can be anywhere from one to three years. And it's still a black mark on your credit record.

There are alternatives to debt settlement programs. The best option is for homeowners, and it's a debt consolidation mortgage. If you aren't a homeowner but you have collateral, you can get a debt consolidation loan. No cash, no house and no collateral doesn't mean you have no options though. You can still enroll in a debt consolidation plan and be out of debt in about five years, give or take, depending on how much you owe. To decide which plan is best for you, contact a debt settlement program and discuss your goals with a professional debt counselor.