The Truth About Debt Settlement

Very few people know the truth about debt settlement; they either don't understand how it fully works or they don't understand how it can help. Most consumers don't know that debt settlement is the best option that they have for becoming debt free. Not only is this option almost always a better choice than bankruptcy, but it is also the one that is easier to enroll in and to finish.

Debt settlement is an excellent way to eliminate debt, pay less than the amount that is owed to the creditors and become debt free faster than with other programs. People paint this program as being totally horrible, believing that it will get a person farther into debt, making the situation worse and doing more damage to a person's credit, leaving a person no choice but to file bankruptcy. This is not the case if you sign up with an honest debt settlement program.

Although this program has its pros and cons, if done right, the pros will outweigh the cons.


CONS:

• One down side is that your credit will be affected. This could lower your credit score 50 to 100 points.
  
  
• You have to wait three months before arbitration can begin, and creditors may come after you during the three month waiting period. Even if you are current on your payments you will still have to wait the three months.
  
  

PROS:

• You will pay into a trust fund during the three month waiting period before arbitration. Afterwards, the money that you had set aside in the trust will be used to help reduce your debt.
  
  
• You will pay less of the amount of the debt owed, reducing the time it will take to pay off the original debt. (You can turn 10 to 15 years into
  1 1/2 to 4 years.)
  
  
• You will not have to file bankruptcy.