subject: Debt Relief Service – A Few Beliefs Related To Debt Relief [print this page] Debt Relief Service A Few Beliefs Related To Debt Relief
If you are constantly having trouble in paying your bills due to lack of fund and your creditors are sending you notices then you are one of the many consumers who is in need of a debt relief service. Many people face such kind of financial crisis because of reasons like unemployment, illness, and accidents or merely because of undisciplined spending. The best way to tackle this situation is to try a debt relief program. However, there are some popular beliefs related to debt relief which makes us shield away from it or over expect from these programs. Some of the common debt relief beliefs are discussed in this article.
Bankruptcy will ruin your credit rating for ever: Your credit rating takes a hit when you file for bankruptcy however the increasing number of late payments and overdue bills was already ruining your credit rating. A bankruptcy will stay on your credit scores for approximately 8 years.
Debt settlement does not affect your credit rating: A consumer must understand that debt settlement will have a negative effect on your credit ratings. Many debt settlement companies advertise that a settlement of debt will not affect the credit score. However, this is not true as this will lower your ratings. Even before you negotiate a settlement, you will have missed some payments which will have lowered your scores as well.
All creditors will agree for a debt settlement: Even though the advertisements and various articles lead you to believe that all creditors will agree for a settlement but that might not be true always. There are many collectors and creditors do not agree to debt settlement options. There is no legal bounding for a creditor to agree to a debt settlement.
Debt settlement reduces your debt by half: Many customers believe that through debt settlement they can reduce their debts by half. This is not true always. Generally, you can get a reduction up to an amount of 40% to 60%. However, there are many credit card companies who will not negotiate for any amount more than 20% to 30%.
Debt consolidation reduces your chances of getting a loan ever again: If your creditor reports a consolidation of debt on your credit report then it stays only till the loan has been paid off. In many cases, there is no effect on the credit score of the person.
If paying your bills is something that you are not being able to afford and it is causing too much stress on you than it is best to take help of a debt relief program.
