There are several debt relief options that you can choose from. One of these includes debt settlement. If you’re wondering if you should go ahead and choose this option, here are a few things you need to know.
The Basics of Debt Settlement
Also known as debt negotiation, debt settlement in Houston, Texas involves wiping out your debt by paying only a portion of what you owe. That means you pay the full amount of the debt. It’s a tempting choice for many borrowers. The thought that you won’t need to pay for it all sounds perfect. However, it does come with certain conditions.
How Debt Settlement Works
A good understanding of how the process works will help you determine if this option or debt consolidation in Richardson, Texas is right for you. Debt settlement reduces your debt by negotiating the terms and conditions of your contract with a debt collector or creditor. You could have program payments less than half of what you are currently paying and be out of debt in as little as 24 to 48 months, depending on what you can afford monthly.
However, it may negatively impact your credit score depending on where you stand now. However, this can be a great alternative to bankruptcy and credit can rebuild relatively quickly once you are debt-free and have a better debt-to-income ratio compared to being settled with high-interest debt.
What are the Pros of Debt Settlement?
Debt settlement allows borrowers to pay back only a portion of the debt. That’s a major draw and one of the chief reasons why people go with this option. It also helps you from filing for bankruptcy. Once you start the debt settlement process, your debts will be resolved one at a time though-out the program.
Are their Cons of Debt Settlement?
There is no perfect solution to resolve overwhelming debt if you can’t afford to easily pay it off. The primary cons are the effect it may have on your credit depending on where it stands today and creditors can still pursue normal collection activities until your debt is settled. But compared to other options, it may give you the opportunity to save the most money and start rebuilding your credit faster and for less money, without filing for bankruptcy.
Finding a Provider
Find a Texas-based provider who is licensed and accredited with the Better Business Bureau. Also, read the reviews and complaints.
