Credit Card Debt Solutions - Pros and Cons of Debt Negotiation Programs
When recession flushed out all the financial assets of people, finding no way of getting rid of the massive debts, they started fling for bankruptcy.
This increased number of bankruptcies proved to be yet another serious blow for the economy.
In order to control the elevating number of bankruptcies and to help the people to live a debt free life all over once again, the government came up with many debt relief options for the debtors.
Among all the debt relief options, debt settlement is considered to be the most accepted and most successful method in order to get rid of the financial crisis.
It is a known fact that every thing has positive as well as negative aspects.
Same is the case with debt settlement concept.
In the underlined article we will be discussing both the aspects of this relief option.
Let us first see positive points of a settlement deal: • The foremost advantage of the debt settlement is that it ensures the over all reduction of 50 to 60%.
• Whenever you apply for this option, your all other accounts are closed and a new account is opened for the settlement payment.
In this way, the accounts which are not in your use and are a source of liability for you will be closed too.
• You get rid of the harassing calls and letters form your lender as soon as you apply for this relief option.
Now let us discuss the negative side of the picture: • When a person applies for this settlement deed, his credit score gets affected.
Although these effects are temporary but the fact is that one has to face this situation once.
• Debt settlement companies change their policies frequently due to which it becomes difficult for a person to keep himself up to date with the changes.
• Main draw back is that although you pay whole amount to your lender, but still at the end of your credit report it is mentioned that debt is settled not that the debt has been paid.
It again leaves bad impression on the minds of people.
These are some of the pros and cons of the settlement option.
But if we study closely we will see that this method has more positive points as compared to the negative points.
This increased number of bankruptcies proved to be yet another serious blow for the economy.
In order to control the elevating number of bankruptcies and to help the people to live a debt free life all over once again, the government came up with many debt relief options for the debtors.
Among all the debt relief options, debt settlement is considered to be the most accepted and most successful method in order to get rid of the financial crisis.
It is a known fact that every thing has positive as well as negative aspects.
Same is the case with debt settlement concept.
In the underlined article we will be discussing both the aspects of this relief option.
Let us first see positive points of a settlement deal: • The foremost advantage of the debt settlement is that it ensures the over all reduction of 50 to 60%.
• Whenever you apply for this option, your all other accounts are closed and a new account is opened for the settlement payment.
In this way, the accounts which are not in your use and are a source of liability for you will be closed too.
• You get rid of the harassing calls and letters form your lender as soon as you apply for this relief option.
Now let us discuss the negative side of the picture: • When a person applies for this settlement deed, his credit score gets affected.
Although these effects are temporary but the fact is that one has to face this situation once.
• Debt settlement companies change their policies frequently due to which it becomes difficult for a person to keep himself up to date with the changes.
• Main draw back is that although you pay whole amount to your lender, but still at the end of your credit report it is mentioned that debt is settled not that the debt has been paid.
It again leaves bad impression on the minds of people.
These are some of the pros and cons of the settlement option.
But if we study closely we will see that this method has more positive points as compared to the negative points.
