If you have debt mounting up and you desperately want to avoid bankruptcy then it may be a good idea to consider debt settlement; that is, if you know where to go. There are a number of ways to get help with debt settlement, but for you to utilize one, you may want to ask yourself, “Do I really need it?”
Before you consider to go through a debt settlement, three questions you must ask yourself are:
What is Debt Settlement?
Debt settlement companies are a part of a huge - unregulated, mind you – industry that is meant to help suffering debtors avoid bankruptcy. How do they do it? They make deals on your behalf with creditors so that you can pay a portion of what you owe. Of course, they want a fee for their services, and the fee may be sizable. However, depending on how much you owed in total to creditors, the fee may be a good enough trade-off to eliminate the hassle of bill collectors stalking you for their money.
Do I Need Debt Settlement?
Now the real question comes into play: do you really need it? Well, it depends. Really, the question you might ask yourself is can you do it? Debt settlement is different than debt consolidation, which combines and pays all of your bills and allows you to repay them over time; or credit counseling, which works with creditors to help you work out a low-interest repayment schedule directly. With debt settlement, the company works with the creditors to lower the lump-sum you owe; however, whatever new sum you owe must be paid in one payment. If you can manage this, then debt settlement may be for you. If not, you may consider one of the other options.
Once you’ve understood what debt settlement is and have considered to go through with the debt settlement plan – the next question would be:
Where Can I Go for Help with Settling Debt?
If you’ve decided that debt settlement is for you then there are a number of places you can go to get help. There are companies all over the country that offer these services. Another option is to consult with a legitimate debt counselor. However, because this industry is unregulated, you will want to conduct a ton of research to make sure the company you choose is legitimate; otherwise you could end up in more financial troubles than you had to begin with.
Many experts suggest that before you think about debt settlement, you should consult an attorney to consider if declaring a bankruptcy is a better option. If bankruptcy is not an option for you then remember to approach any debt settlement company with extreme caution.
For more recent information regarding debt settlement, refer to our debt settlement page.