Is it really worth it to go through debt settlement?
This is the scenario that you are dealing with at the moment; you are three (3) months behind on just about every bill that you have, owing thousands of dollars that you just do not have the money to pay and looking for a solution to this massive problem. You are considering three possible solutions to this problem: debt settlement, debt consolidation and possibly filing for Chapter 7 or Chapter 13 bankruptcy status.
There is a great deal that can be said for both going through debt consolidation and bankruptcy that is both good and bad; yet there is not very much that is good that can be said about the debt settlement process. The main sticking points against the debt settlement process are: that you really have no idea about exactly how much that you are going to wind up paying the debt settlement company in service fees; you do not really know when they are actually going to start paying down your debt and if you are sued or the creditors send your file to a collection agency (or take any type of legal action to get their money) they will drop your file like a hot potato because they cannot represent you in court nor can they advise you in any way in regards to legal matters (because they are not attorneys).
All of the above points are the negatives about working with a debt settlement company to get your debts reduced and settled. On of the good things that these debt settlement companies can do is to get your original debt negotiated down to somewhere between 20 and 75 percent of the original amount. This really does sound good to most people, yet there are a few other things that will not end up sounding that great to them once they really start reading and researching the debt settlement process.
One of the things that the debt settlement company will tell you to do is that you need to stop ending you payments directly to the creditor, and start sending that money to them (the debt settlement company). This is not that great of an idea due to the fact that you are still indebted to your primary creditors and the longer you go without making any type of payments to them, the worse you credit gets damaged. Not paying your primary creditors will definitely come back to bite you; especially when those creditors do more than refer your account to a collection agency. As soon as those creditors decide that they are going to file a lawsuit against you for non-payment of your debts, you are going to lose the debt settlement company’s “help” due to the fact that they cannot do anything in that case. You might want to consider credit counseling and debt consolidation as a good alternative to this situation. For some people, debt settlement does work out very well and their debts with their creditors are settled, but are marked as “Paid-Settled” not “Paid in Full”.
