When it comes to deciding about which debt relief option is best, the choices can seem endless. There are numerous options available, all offering enticing results. So how to do you know which is best for you?
To have your debts settled, you are basically requesting that your creditor agree to accept less than is owed on the account. Many creditors may be willing to settle on an amount for repayment, but successfully negotiating the deal can be tough. Many third party companies will offer to settle your debts for “pennies on the dollar” claiming to save you money. Although many companies may be able to negotiate such a deal, you are likely to end up paying the difference to the company for their negotiating services.
In general, debt settlement is an option for those who cannot afford to repay their debts and should be used as one of the last resort options. Debt settlement can be serious business and you run the risk of having your credit damaged more so when you settle your debt than when you negotiate a repayment plan to pay those debts in full.
Many people do not realize that they have the right to negotiate their debts directly with their creditors. In fact, many people have successfully negotiated a repayment plan that helped them get out of debt without busting their budget. Debt negotiation involved requesting changes to the original terms and conditions of the account, such as a reduction in the interest rate, a waiver of penalty or delinquency fees or an extended time period in which to repay the debts.
Debt negotiation is appropriate for anyone who can afford to repay their debts, no matter how small the payment or how long the repayment plan takes. Your credit has a better chance of staying clean through a debt negotiation than through a debt settlement.