Negotiate a Debt Settlement

Debt Settlement VS Bankruptcy?

how much better is the debt settlement option for your credit rating? i was considering calling Credit Solutions who claim they can reduce the total amount of debt by 40 to 60%

Public Comments

1. i have no idea..but im going to continue looking at your question for more answers. cause that is something that im looking forwards too.. thanks for the quetion
2. Hey, I don't actually know the answer to this one. I would assume that debt settlement is A LOT better for your credit rating than bankruptcy... keep in mind that bankruptcy stays on your record for 10 years. But what I really wanted to share with you is a quick warning - something that just happened to my boyfiend. When you settle a debt with a collector (no matter who the collector is), whatever portion of your debt that they "forgive" you for is reported to the IRS and they add that amount to your income for tax purposes... so you get taxed more. I would opt for debt settlement rather than bankruptcy, but I think this is something you need to be aware of and prepare for. Best wishes to you!
3. Well Debt settlement is pretty complicated. Plus they are going to throw in a bunch of fees and hidden charges (so that they get their cake and eat it too) and things of that nature. Depending on how much debt you have its probably going to be a big bill bigger than all of your bills combined even. Bankruptcy is probably easier. You only have to pay once and after its all said it done your bad credit and debt is TOTALLY wiped away with no gimmicks. But when filing bankruptcy MAKE SURE you have a great lawyer and if you have property make sure its protected. Once you file bankruptcy all the companies you know will try their hardest to get their money anyway they can. Whether it be trying to take your land or your valuables. If you have a good lawyer it won't be so scary. I Advise you not to file chapter 13 bankruptcy but Chapter 9 its much easier and less hassle. If you really want to know more about bankruptcy most bankruptcy lawyers have Free consultations. They tell you everything you need to know , the pros the cons, what will happen when you file etc. If you don't like the way bankruptcy sounds try the Debt settlement.
4. It is much better. I work with Battered women I have them use a credit counseling center first. AND depending on your state you may need to try that first: Debt Counseling We can lower Payments & Stress!BBB Ethics Award Winner 2006 www.TakeChargeAmerica.org Try this website first. Make sure to ask if you can keep one credit card open for emergencies as that will keep your credit ratting up and leave you with something if you need it
5. Credit counselling and bankruptcy both adversely affect your credit rating the same way. The counselling is a prolonged exercise that places a burden on your monthly cash flow. Bankruptcy is immediate relief. If I was faced with the choice, I would pick bankruptcy. Get it over with and get on with your life.
6. Well, its like having the cup half full or empty. Which is better? If you want to settle your debt I do not recommend that you use any credit management company. The reasons are that these companies... 1. Destroy your credit even further. The reason for this is that they have to allow your account to be moved to collection agencies before they can settle. If it isnt already. Additionally they pull your credit report and there is an inquiry from them. 2. They can not stop a lawsuit or a bill collector from coming after you. The bill collector or creditor may choose not to discuss your account with them at all and trash their letters or terminate their calls. They have no obligation to accept offers or payment plans or even have a simple chat with them, they can not make collectors or creditors do anything. 3. They charge you for a task you can do yourself. What they do is call your creditors and beg for payment plans or settlements. That is something you can do on your own. Call the collector or creditor and begin your settlement offers at 30% for credit accounts and 15% for medical bills. The collector will work you up but put your foot down when you reached your max. Your max should not be more than 60%. Tip: Try and settle your debts close to the end of the month, thats will collectors are frantic to make their quotes. When you cut your deals, be sure to get it all in writing before you pay them at all. Also, while you negotiate try and make them throw in a deletions. As in wipe it off your credit report. Make sure to get that in writing as well. Some collectors will require that you pay in full for a deletion. Go to www.annualcreditreports.com and get a free copy of your credit report so that you can call your accounts. Make sure to check the laws in your state as far as statute of limitations for credit reporting, as it can differ from state to state. If its past statute you can have it dropped of your credit report and its not worth paying for it. If you see anything that does not belong to you...dispute it. But it must fraud so you need to file a police report and forward a copy to the collector. Do not dispute accounts that are valid as the bill collector knows if they are valid since they have paper work with your signiture or a contract, etc. What happens is that they collector gets upset and things your trying to mess with them or your trying to stall so that makes them pull the trigger and file a lawsuit. You dont want that. Judgments stay on your credit for 10 years and can be renewed in some states once so thats 20 years and others like CA, more. And you cant get rid of that till you file BKC which stays on your credit report now for 10 years. Good Luck
7. Since your question is specifically about your credit rating.... Bankruptcy is always terrible. Credit repair will also hurt but really depends on how many creditors you have and what your overall condition is. I really don't have enough info to recommend either. Just keep in mind that many of the claims from credit repair places are way overblown. And many of the things they do, you can easily do yourself.