Credit Card Debt Settlement - What You Need to Know...
Is Credit Card Debt Settlement the Best Option for You?
Who is a Candidate for Credit Card Debt Settlement?Credit card debt settlement is the process of working with your creditors to repay your owed balances as quickly as possible by offering them a lump sum to pay off our account in full.
If negotiated properly, a professional credit card debt settlement company can usually allow you to close and pay off your account at 40-60% of what is owed.
Are You a Candidate?
If you can comfortably pay your bills, you should always do that as a first priority. However, if you've reached a point where your minimum payments are becoming overwhelming, or where you are eating up all of your savings trying to make your payments- then credit card debt settlement is a good option for you.
As with every decision, there are "Pros" and "Cons" to using a credit card debt settlement program to handle your bills and obligations, and it is up to you to decide what is in your best interest.
The key in making your decision is to be as educated as possible about your options, and then compare those options with your own personal situation. Everyone's financial status is different and a credit card debt settlement program is not the right choice for some people.
What Are the Advantages & Disadvantages?
Here are a few of the advantages (Pros) and disadvantages (Cons) to consider when evaluating credit card debt settlement as an option:
Disadvantages:
1) If you have a good FICO score, then your score/rating will go down.
2) Credit card debt settlement doesn't stop your creditors from calling the way that a Bankruptcy will.
Advantages:
1) If your FICO score is already bad, it will not be affected adversely.
2) You can immediately (this month) drop your monthly payments significantly (often cutting the payments in half or lower.)
3) In most cases you will be completely paid off with your creditors within 18-48 months.
4) If your credit card debt settlement program is properly structured, you can have access to the money you've paid into the program (less fees) if you need it in an emergency.
5) Most credit card debt settlement programs have no fees to be paid up front. The costs of the program are wrapped into the low monthly payments making it easy to enroll without draining your savings.
6) Credit card debt settlement costs significantly less than the $1,500-$7,000 of filing bankruptcy.
Educate Yourself on Your Situation
Each credit card debt settlement program is slightly different, so talking with a professional to become educated is very important. If at all possible talk with an independent councilor or advisor who has researched different companies and can steer you in the direction of a reputable company with solid programs and a good track record.
Credit card debt settlement isn't the answer for everyone, but can considerably help many people who are allowing minimum payments to limit their lifestyle and cause undue stress. To find out more about reputable programs, talk to a credit card debt settlement specialist before your situation gets worse. They should be able to objectively walk through all of your options for getting out of debt to be sure that you make the best decision for your situation.
by rcr310
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