subject: Are Debt Settlement Programs Worth Getting a Lower Credit Score? Debt Relief Advice [print this page] Are Debt Settlement Programs Worth Getting a Lower Credit Score? Debt Relief Advice
If you are like millions of other people across the country you more then likely have 2 or 3 credit cards sitting in your wallet, a car loan for the car or two that is sitting in your drive way and a mortgage for the house you are currently living in. All of this adding up to hundreds of thousands of dollars you are potentially in debt. For many people this is a fine balancing act in order to ensure that all of these bills are paid on time as well as the rest of the financial responsibilities that they may have. If one of the family members were to fall ill, or worse the main bread winner were to fall ill, the affects would be devastating.
Now, there are debt settlement programs that will allow you to combine all of the money you owe to different companies into one monthly payment in order to make it easier to manage the payments and negotiate a new set of terms for the debt.
Often going through this process will lower your credit score but if you already have the car and the house chances are you can survive without having to get another loan for quite a while. This means that your credit score being lowered temporarily will not make a difference as while you are paying off the debt you are also raising your credit score once again.
Because you have negotiated a settlement between you and your creditors you no longer have to worry about your credit card company or your bank raising your interest rates any higher then what they were, and often you end up with lower interest rates. So the ding to your credit score is nominal.
So in many ways it is completely worth getting a lower credit score in order to make things easier to manage.
Debt settlement is a viable alternative to filing bankruptcy. Most consumers are able to eliminate at least 60% of their unsecured debt while avoiding many of the negative consequences with filing bankruptcy. If you are over $10k in unsecured debt you will be eligible for debt settlement.
