subject: Debt Settlement Relief - Will Unemployment Affect My Debt Settlement? [print this page] Debt settlement relief has outpaced bankruptcy after the recession. This is because of the fact that once people successfully filed for bankruptcy, they faced numerous other financial troubles. The credit score of the consumers went down and they lost their credibility. As a result of which, they failed to get any further credit. This will continue for the next 7-10 years that will follow. This will happen because the report of bankruptcy filing will continue to show up on the credit history for that particular phase of time. After that time period, once the consumer gets back credibility, he or she will be reduced to sub-prime consumers. This means that they will be able to get further credit from the credit organizations but the rate of interest that will be charged will be greater than the usual market rates. Because of these reasons, the consumers are more inclined towards getting debt settlement relief.
Unemployment has a big impact on debt settlement. Settlement requires you to have a minimum debt of $10k. Anything less than that will not work. Also the loan needs to be consolidated in one single place. The other requirement laid down by law is that you need to prove financial hardship. This can be an easy ball to play in your court. Unemployment by itself is a great proof of financial hardship. It then becomes easier for the debt negotiator to convince the creditor to eliminate a huge portion of the unsecured debt that you have. Depending on the negotiation skills of the negotiator, you can enjoy an elimination of up to 70%. This means that you will then have to repay only 30% of the debt to the creditor.
The negotiator will ask you to go delinquent and once you stop paying, the creditor will sell off the debt to a collection agency. The collection agency will gain an upper hand by agreeing to pay only 20-30 cents on the dollar to the creditor. The negotiator will then offer 30-50 cents to the creditor which will mean 100% return on investment for the collection agency. The negotiator will also threaten the creditor that since you are unemployed, you will be left with no other option but to file for bankruptcy in case the deal is declined by the creditor. The creditor will never want this and will accept the deal. This is how unemployment will affect your debt settlement.
Debt settlement is a viable option to filing bankruptcy and is becoming increasingly popular amongst Americans with over $10k in unsecured debt. Creditors are ready to negotiate. You can literally eliminate 50% of your unsecured debt with a settlement.
Debt Settlement Relief - Will Unemployment Affect My Debt Settlement?
