Is Your Debt out of Control?

If you are one of the millions of people who are struggling with what seems like unmanageable debt, there are a few options for you to consider. Two of the more popular choices are bankruptcy and using a debt settlement service.

Only you can determine which decision is best for your circumstances. While eliminating debt may be easier than you think, there are many cases when filing for bankruptcy simply makes more sense. This article isn’t necessarily to persuade you one way or the other, simply to inform you about using a debt settlement program.

What you need to know

Contrary to what you may have heard, using one of these companies doesn’t guarantee you will see an increase in your credit score. In fact, there are times that despite the best efforts of people working with you, your credit score could actually fall. Before you agree to anything, you will need to learn how debt settlement affects your credit personally.

This doesn’t mean that someone has taken advantage of you or done anything wrong. This is simply how the law works in several states. Yes, a debt settlement company will help you eliminate your debt. No, they do not have a magic wand to change your credit history due to your past decisions when it comes to finances.

Do you qualify for a debt settlement program?

Another misconception that several people have is anyone is able to have their credit card debt decreased by as much as 50 percent by working with a debt settlement company. People who believe this fail to realize there is actually a qualifying process a potential client will need to go through.

For starters, you are going to need to be able to prove you are facing a legitimate hardship. The fact that you were careless with the way you spent money in the past doesn’t exactly mean you will be approved.

Ideally, a candidate who qualifies for debt settlement will experience the loss of a job, a significant decrease in your monthly income, medical problems, or a divorce. Although there are instances, very rarely will you be qualified simply because your debt has spiraled out of control.

Several people also have been led to believe that it’s impossible to erase large amounts of credit card debt without paying someone to help. This is a tricky answer. Yes by all means, it is possible to negotiate your debt with creditors and be able to save yourself a lot of money.

However, by paying a debt settlement company, you give yourself a better chance. Just like any other professional area, there are tricks to the trade. These professionals have negotiated with enough credit card companies that they have been able to establish the connections which make the process easier.

If your debt is beginning to get out of hand, it’s not going to go away on its own. You need to take action on improving the situation. A debt settlement program may be just what you need to get on track and begin preparing a better future for yourself.

Keep in mind, a debt settlement program is a service. Because of this, not every company is going to be the same. Do your research. Find out not only what the customers are saying about a particular program, also look into what you can in regards to the financial institutions they have worked with in the past.