It is important to take certain debt settlement advice seriously when deciding whether or not to hire a company to try to reduce your debt. For example, if your debt is so out of control that it will likely take longer than 36 months to negotiate settlements, bankruptcy might be a better option. After 24 months of negotiations, the stakes become higher.
Your savings in terms of debt reduction may be insignificant because you will have racked up so much more debt during the debt settlement process. And in addition, you will still have to pay the 25-35% of forgiven debt fee that the debt settlement company will charge you.
Another important piece of debt settlement advice is to be aware of the negatives associated with debt settlement. Debt settlement companies should only be used as a last resort as an alternative to bankruptcy. If you only owe a small amount of debt, it is best to continue making monthly payments. Even if you have not made payments for a while and creditors are calling you, you can still work towards fixing your credit by making timely payments over a significant period of time.
Debt settlement will adversely affect your credit score. It will not go unnoticed and the only way to completely clear your credit with no trace is to pay in full on time. However, if you are far behind on payments for a large amount of money and foresee no change in your income status in the future, debt settlement is far superior to filing for bankruptcy.

Tags: Bankruptcy, Debt, debt settlement

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