There are many advantages of debt settlement and the early go for it the better it is for your credit score. Wondering why? Here are some reasons for it:
It is true that the debt settlement saves money. It not just helps you get out of debt, but you also maintain your credibility. When you go to such unsecured debt settlement, you are being forgiven and allowed to pay a smaller amount, so the creditors get lesser than what they owe. But same is not true with debt consolidation. In this case, you’ll be paying full credit card balance and also lots of interest, so the saving is lesser when you go for debt consolidation.
It is simple to understand. Say you owe USD 20000 and you settle for paying USD 15000 then you have a smaller amount to come out of the debt so you can come out of debt quickly.
Yes, when you owe the credit card company thousands of dollars it may seem that they are in charge, but things are not so simple for them. The entire credit card debt is considered to be unsecured, and the lenders can’t do much about it. They may sue you, but it is only in circumstances when you are completely ignoring their demands for the payment. Most of us might not prefer to do that. You are always looking out for a solution and work with your creditors all the way. Given higher costs of litigation, most of the credit card companies are inclined to go for the negotiations out of court.
You might not be aware of the fact that the credit card companies own most of the debt consolidation companies. You might be surprised to learn that, but not all are funded by these credit card industry organizations. So you may safely conclude that the underlying objective of the debt consolidation companies is to make sure that you are alive enough financially just to pay their debts. Isn't it slave? But you are not, so debt settlement is a surely better option.
Yes, the credit score surely takes a hit when you go for debt settlement, but as you pay the rest of the amount, your credit score bounces back.
Unsecured debt settlement has many benefits, and you must avail it at the earliest to make sure that you are debt free.