Debt Settlement Questions

When inquiring about debt settlement one may have a lot of questions. Below are some frequently asked questions that consumers are asking. This may help when deciding if debt settlement will best suit you.

Prior to addressing these questions, debt settlement is the process to which a consumer cuts the debts owed by a fraction of the amount. It's very common for consumers to purposely fall behind, given the credit card debt is active and current. If a consumer doesn't want to fall behind, the only other option would be that of debt consolidation. Now by entering a debt settlement program, temporary harassment is common and is to be expected. For more information on debt settlement, here is the debt settlement program link

When settling ones debt they are getting their balances cut by anywhere from 40 to 70% of their balances. They are offered a low minimum payment without all of the high interest rates that they currently had. This help to pay off ones debt in a more timely manner.

Debt settlement program is for unsecured debt such as medical debt, collection accounts, credit cards, unsecured personal loans and so on. Any debt that is not tied to some sort of collateral would be unsecured debt.

How do I know if my debt is secured or unsecured?

Unsecured debt is debt that is not attached to collateral like credit cards, medical and some loans. Secured debt is usually one’s home, land or any debt that is tied to collateral.

What if the creditor will not accept the settlement offer?

If the debt is setting without a negotiation chances are there will be a settlement. It is rare, but if a creditor does not agree chances are in due time they will. They would rather get some type of payment than no payment at all. Taking you to court may not be worth it due to more costs that they will accumulate.

Do I have to hire an attorney for debt settlement?

No, reputable debt settlement companies will offer attorneys to their clients for any legal advice that they may need.

Will my wages be garnished if I do not pay?

It is a possibility that one’s wages can be garnished. This is a long process that the creditor will have to take you through. In most cases it is not worth the time or trouble that this would take for them to do so.They will have to file a garnishment with the courts first. Doing settlement can stop this from happening. Most judges will appreciate the effort that one makes in resolving the debt.

Does debt settlement harm my credit score?

Debt settlement will reflect on one’s credit score, but keep in mind this can be a good thing. It shows that you are making an effort to pay back the debt. After the debt is paid the settlement will no longer be on your credit score. Unlike bankruptcy that can take up to 7 to 10 years.

Can I be sued after doing a debt settlement program?

Creditors do have the right to sue for non-payment at any time. However creditors will appreciate the efforts of payment. They usually will not take the time and money to bring you into court.

Wouldn’t it be better to just file for bankruptcy?

Absolutely not, bankruptcy is a very final act that cannot be restored for 7 to 10 years. Regardless if one pays off their debt the bankruptcy will linger for some time. When doing settlement you are getting a chance to get caught up and restore your credit.

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