Pros and Cons of Debt Settlement

Debt Settlement or Debt Negotiation can be an excellent way to eliminate debt without filing bankruptcy, provided you are a good candidate for debt settlement. An experienced debt settlement company will go through a series of questions to see if you would qualify for a debt settlement program. The ideal candidate for debt settlement will have a debt amount of $10,000 or more and has a means to accumulate money over a relatively short period of time that will allow them to offer a lump sum payment to their creditors. In some cases an experienced debt settlement company can set you up on a payment plan with a creditor to eliminate your debt.

In doing this, the debtor can potentially save thousands of dollars in what they would have otherwise owed. Furthermore, by settling the debts, the debtor gains the advantage of reducing their monthly payments and paying off his or her creditors in a much shorter time frame than if they were to make minimum payments on their own.

Through Debt Settlement or Debt Negotiation, overall debt can be eliminated in as 3 years, or sooner. Most debt settlement or debt negotiation programs range between 12 and 36 months.

There are a few negatives that you must consider should you choose to pursue a debt settlement or debt negotiation program.

• Your debt will increase before it decreases.

• A debt settlement or debt negotiation program will have a negative effect on your credit.

• It may be the case your credit score has already been effected due to your current situation

• A creditor can report to the IRS any excess of $600.00 in savings. This means you can potentially be taxed on any savings greater than $600. However, there are instances where you can avoid this tax. Financial Choice Network suggests you always consult a tax professional about your individual situation.

For a free consultation call, or fill out the form and a experienced financial advisor will assess your situation and put you in contact with the best provider to suit your needs!