Debt settlement can help you to get rid of your debts when you have huge amount of multiple debts to pay off. Debt reduction/settlement is a process of negotiating with your creditors so that they accept an amount less than what you owe to them. Before proceeding with this method, it is quite important to clear your misconceptions regarding debt settlement. Read on to know about some common debt reduction myths and the truth behind them.
4 Myths about debt reduction
Myth: Debt settlement will not have any negative effect on your score.
Truth: Debt settlement has an adverse effect on your score. What happens is, when you enroll yourself in a settlement program, you stop paying to your creditors for the time being and deposit your monthly payments into a settlement account. These late payments may cause your score to drop to some extent. Moreover, when you settle your debts, the accounts get updated as “paid as settled” in your report.
Myth: You require professional help to settle your debts.
Truth: Though you can take professional help to reduce your debts and repay them, yet it is not mandatory to enroll in a settlement company. You can very well do it on your own. Moreover, there are several credit card companies that refuse to talk to debt reduction firms. You’ll also save the amount that you need to pay as professional fees if you settle your debts on your own.
Myth: Debt settlement is the only option when you’re not able to make your monthly payments on time.
Truth: When you experience a financial hardship, you should go for a credit counseling session, where a counselor can offer suitable suggestions to manage debts. If required, the counseling agency may offer a debt management plan with the help of which you can consolidate and repay your multiple debts just by paying a single payment every month. A consolidation company may also help you to pay off your debts without hurting your credit score.
Myth: You can settle each and every debt you owe.
Truth: In reality, it is not possible to reduce every debt you owe. As for example, you’ll not be able to settle your secured debts, such as, your car loans and your mortgage. In addition to this, it is also not possible to reduce your student loans and the income tax payments you owe. Debt settlement is quite effective to reduce unsecured debts, like your credit card debts, medical bills, overdue rent, department store cards, etc.
You can take help of online forums if you have any other doubts on debt reduction. You can post your queries to the forums and the experts or community members will answer your questions. They can also help you to choose a good and reliable settlement company that can help you to pay off your debts quickly.
Keyphrase: debt reduction
Description: Get to know about 4 debt reduction myths and the truth behind them.
4 Myths about debt reduction
Myth: Debt settlement will not have any negative effect on your score.
Truth: Debt settlement has an adverse effect on your score. What happens is, when you enroll yourself in a settlement program, you stop paying to your creditors for the time being and deposit your monthly payments into a settlement account. These late payments may cause your score to drop to some extent. Moreover, when you settle your debts, the accounts get updated as “paid as settled” in your report.
Myth: You require professional help to settle your debts.
Truth: Though you can take professional help to reduce your debts and repay them, yet it is not mandatory to enroll in a settlement company. You can very well do it on your own. Moreover, there are several credit card companies that refuse to talk to debt reduction firms. You’ll also save the amount that you need to pay as professional fees if you settle your debts on your own.
Myth: Debt settlement is the only option when you’re not able to make your monthly payments on time.
Truth: When you experience a financial hardship, you should go for a credit counseling session, where a counselor can offer suitable suggestions to manage debts. If required, the counseling agency may offer a debt management plan with the help of which you can consolidate and repay your multiple debts just by paying a single payment every month. A consolidation company may also help you to pay off your debts without hurting your credit score.
Myth: You can settle each and every debt you owe.
Truth: In reality, it is not possible to reduce every debt you owe. As for example, you’ll not be able to settle your secured debts, such as, your car loans and your mortgage. In addition to this, it is also not possible to reduce your student loans and the income tax payments you owe. Debt settlement is quite effective to reduce unsecured debts, like your credit card debts, medical bills, overdue rent, department store cards, etc.
You can take help of online forums if you have any other doubts on debt reduction. You can post your queries to the forums and the experts or community members will answer your questions. They can also help you to choose a good and reliable settlement company that can help you to pay off your debts quickly.
Keyphrase: debt reduction
Description: Get to know about 4 debt reduction myths and the truth behind them.
