If you have a lot of debt and are struggling to make ends meet each month, you've probably given your options for getting out of debt a long and serious look. You've probably read more than you want to know about consumer credit counselling, bankruptcy, debt consolidation, and debt settlement, but your determination to find a way out of your financial mess has led you to think that debt settlement might be a good idea.
There are, however, a few things you need to think about before making a final decision about debt settlement. The most important of these is whether or not you have enough money to pay your creditors the agreed-upon settlements. You see, if it's not likely that you'll be able to pay the settlements you've negotiated with your creditors, you've already made your decision, and debt settlement is not the right choice for you.
When you've been talking to a creditor for a while and finally come to an agreement that works for both of you, you're expected to send money to that creditor. Some creditors will let you pay off the settlement amount over a few months, while others will only accept payment in one lump sum. In either case, if you don't stick to the settlement agreement you made with your creditor, the agreement is null and void, and you'll have to pay the full amount of your debt.
If you don't think money will be a problem, debt settlement can be a great way to get out of a financial jam. Even though your credit score may go down for a short time (if it hasn't already), it will go up a lot once your accounts show a zero balance. Also, a lot of people worry that settling their debts could mean they have to pay more taxes. Visit http://donaldsonwilliams.com/Debt Settlement And Income Taxes.html to find out more about debt settlement and taxes.
Lastly, let's take a look at your final choice, because it's not easy to make that choice. In fact, it's so scary that most people don't want to think about it. No matter what decision you make about the best way to solve your financial problems, it's new territory, and none of us really want to think about losing our credit privileges, whether through bankruptcy, debt settlement, or consumer credit counselling. I can say with a lot of certainty, though, that you'll finally feel better once you've decided which choice is best for you. I would tell you not to put it off. Putting things off just means you'll have to struggle to pay your bills for a few more months. If you look at the big picture, you'll see that in a few short years (or maybe even months), you'll be debt-free, your credit score will be back to normal, and you'll be able to hold your head high knowing that you faced a very tough situation and got through it just fine, and you probably learned a lot in the process.
