If you owe around $10,000 or more in credit card debt, you may hear that debt settlement is a great debt relief option for you.
In most cases it is, but you are likely to have many questions if you are unfamiliar with the entire process.
Question: What is debt settlement? Answer: It is also commonly referred to as debt reduction.
In most cases, the services of a professional settlement company are used.
That company will contact and negotiate with the credit card companies.
The goal is to get the total of your debt reduced to an amount that is more affordable for you to pay.
Question: Why do credit card companies agree to settlement offers? Answer: They don't agree to them all.
As mentioned above, your chances improve when hiring a professional settlement company and when you owe more than $10,000 to the credit card companies.
It also helps if you have missed or made a few late payments because you are typically then deemed an at-risk consumer, which is someone who may later file for bankruptcy.
Question: Are there are consequences to opting for debt settlement? Answer: Yes there is one significant one; you will take a negative hit on your credit score.
The good news is that this negative impact isn't as bad as it is with bankruptcy.
When you file for bankruptcy, it will impact your credit score for seven years, but debt settlement only does so for about one to two years.
Question: How can I find a professional debt settlement company? Answer: As stated above, you will have more luck getting your credit card companies to agree to a settlement offer when you have a professional in your corner.
Instead of searching for settlement company or program websites online, visit the online website of a debt relief network.
These networks all work with a handful of debt relief companies, but they test and track them to ensure they are good and legitimate.
In most cases it is, but you are likely to have many questions if you are unfamiliar with the entire process.
Question: What is debt settlement? Answer: It is also commonly referred to as debt reduction.
In most cases, the services of a professional settlement company are used.
That company will contact and negotiate with the credit card companies.
The goal is to get the total of your debt reduced to an amount that is more affordable for you to pay.
Question: Why do credit card companies agree to settlement offers? Answer: They don't agree to them all.
As mentioned above, your chances improve when hiring a professional settlement company and when you owe more than $10,000 to the credit card companies.
It also helps if you have missed or made a few late payments because you are typically then deemed an at-risk consumer, which is someone who may later file for bankruptcy.
Question: Are there are consequences to opting for debt settlement? Answer: Yes there is one significant one; you will take a negative hit on your credit score.
The good news is that this negative impact isn't as bad as it is with bankruptcy.
When you file for bankruptcy, it will impact your credit score for seven years, but debt settlement only does so for about one to two years.
Question: How can I find a professional debt settlement company? Answer: As stated above, you will have more luck getting your credit card companies to agree to a settlement offer when you have a professional in your corner.
Instead of searching for settlement company or program websites online, visit the online website of a debt relief network.
These networks all work with a handful of debt relief companies, but they test and track them to ensure they are good and legitimate.
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