subject: Do Debt Relief Management Services Ruin Your Credit? [print this page] Do Debt Relief Management Services Ruin Your Credit?
Many debtors often ask if Debt Relief programs actually make sense to them and are they worth the money spent. To understand the concept, Debt Relief programs provide the much needed relief to individuals and families who are in debt. They save debtors from the financial and emotional trauma.
It is often argued by debt by debt professionals that seeking a Debt Relief Program not only helps to get rid of debt but also helps debtors to continue with a financially secure life. There is no doubt that to an individual or family in debt these relief programs can be a very good idea; however there are a few cons to these relief programs. To understand them better we will analyze the Pros and Cons and if these programs can ruin your credit.
Pros of a Debt Relief Management Services:
1. Help you get out of debt:
The most common reason is that debt relief management services show a structured and organized way out of debt. Debt relief programs like debt consolidation, debt management and debt settlement programs help in getting rid of debt and also save substantial amount.
2. End to harassment from collectors:
Enrollment to these programs ensures an end to harassment from collectors. The collection letters, calls from creditors can be stopped temporarily through such programs as you make honest efforts to pay your dues.
3. Helps you lower Interest Rates, Monthly Payments, and Waive penalties
These Debt Relief programs help you save considerable amount of money. The effective negotiation skills of debt consultants can result in lower interest rates and monthly payments.
Drawback of Debt Relief Management Services:
Now comes the sad part of the Debt Relief management Services. They do have drawbacks and the reason is because they help you settle your debt or pay less than what you owe.
Debt relief options like debt settlement programs hurt your credit score. The partial settlement payment towards the entire debt gets reported as "settled". This reflects on the report; however the good news is that unlike Bankruptcy it does not follow you for years to come.
Debt Relief Management Services do ruin your credit, the damage however is repairable. A debt situation leaves a mark emotionally, financially as well as on your credit score. If we look at the brighter side of these programs it is clear that the benefits definitely overpower drawbacks. At the end of the day they are much better than Bankruptcy.
