Negotiate a Debt Settlement

Debt Settlement - Pros and cons?

what are the pros and cons for a person that settles their debts with credit card companies for less than the amount owed? (Debt settlement) and how does this affect your credit rating afterwards? thank you ahead of time for all responses!

Public Comments

1. If you have the money to settle a debt I would say do it. As long as you're settling with your creditors and not a debt settlement company. A lot of those places are scams. It helps your credit because the company reports it as paid in full so they stop reporting it and it'll work itself off your credit report. Those are the pros, the cons would be that most people don't have enough money to offer a settlement. If you do ask them for 50 cents on the dollar. They may even go lower if you want to try. 60 cents is the usual rate but I've seen then go as low as 40. Remember to research it beforehand and good luck. Congrats on getting in control.
2. Cons first: bad credit while you are in the program and a year or two after, you could still get collection calls and actions. Pros of Debt Settlement: Cut Payments, Cut Debts, Save a ton, Be Debt Free Fast, Avoid Bankruptcy. It's not for everyone, and if you only owe a little bit of debt i would seriously consider if the negative credit impact and short term headaches are worth the headaches... but if you owe more than $10k and are struggling, then it might be for you. Bills.com some good info (i've put a bit below) but they compare all of your alternatives (including debt consolidation, debt settlement, credit counseling, etc) and evaluate the leading debt settlement players (http://www.bills.com/freedomdebtrelief) Debt Settlement Debt settlement, also called debt negotiation, is a form of online debt consolidation that cuts your total debt, sometimes over 50%, with lower monthly payments. Debt settlement programs typically run around three years. It is important to keep in mind, however, that during the life of your debt settlement program, you are NOT paying your creditors. This means that a debt settlement solution of online debt consolidation will negatively impact your credit rating. Your credit rating will not be good, at a minimum, for the term of your debt settlement program. However, debt settlement is usually the fastest and cheapest way to debt freedom, with a low monthly payment, while avoiding Chapter 7 Bankruptcy. The trade-off here is a negative credit rating versus saving money. Check out: http://www.bills.com/blog/credit-card-debt-consolidation/ & http://www.bills.com/debt-help