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First,
what is debt settlement? Debt settlement is a negotiation between you, the debtor, and your
creditor over the amount you will pay to eliminate the balance due on your account. Debt
settlement is certainly not taking the easy way out. It is reaching an accommodation with an
entity that you owe money to instead of the alternative which is not paying them anything. It is
legal, honorable, ethical and perfectly within your rights to do so. And through debt
settlement, unlike bankruptcy, there is no public record.
Individuals who
pursue debt settlement have faced or are facing some kind of financial hardship, like being laid
off from a job, going through a divorce, demotion, cut back in work hours, unexpected medical
condition, and/or failed businesses. We do not advocate casually negotiating your debt.
Debt settlement is powerful medicine and should be used only by those that truly need it. For
the sake of those people that really need this kind of solution, if you are able to make the
payments to your creditors without further hardship, do so. There are other ways of resolving
debt in an expedited fashion that does not require such hard
medicine.
So, the big
questions you need to ask yourself when considering debt settlement
are:
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Can I
reasonably make the agreed to monthly payments to my creditors without jeopardizing my
well being (keeping a roof over your head, food on your table, warm in the winter and
cool in the summer) or making life unbearable?
-
Will
making monthly payments to my creditors help me achieve the primary goals of paying off
my debt and achieving good credit in the foreseeable future (if your accounts are with
collection agencies or attorneys, the answer is probably no)?
-
Is the
debt of concern mainly unsecured debt such as credit cards and unsecured loans (if the
debt you are looking to deal with is mortgages and car loans, debt settlement will not
be an answer)?
-
Do you
have a reasonable tolerance to pain (there was a time that receiving aggressive
collection calls was a foregone by product of debt settlement, but now, calls can just
about be abolished)?
-
Are you
able to set aside a reasonable amount of money each month toward the settlement of your
debt (I usually use a rule of thumb of at least 2 percent of the
debt)?
-
Do you
have any moral or religious beliefs that will cause you severe guilt over not paying
your debts in full?
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