subject: Credit Card Debt Settlements - Pros and Cons of Utilizing a Debt Settlement Organization For Help [print this page] Sometimes debtors face certain financial conditions where fulfilling debt obligations can become difficult. One of the options for tackling this problem is through debt settlement. There are many settlement companies which can help you settle your debt. However, many would argue that the process itself is simple and hence a debtor can settle his own debts with his creditors. Here we will try to highlight all the pros as well as the cons of using a settlement company for your negotiations.
Pros:
A creditor agrees to settle debt with his client only if he thinks that the debtor's financial condition is such that he can file for bankruptcy. They see debt settlement as a good way to recover maximum money from their consumers. Hence we must understand that the bargain that they will put up will be very strong and mostly air tight. A debtor has to be a skilled negotiator to get a good bargain from his creditors. Otherwise, they might end up paying as high as 80 % of the debt back to their creditors when is possible to get away by paying as less as 50 % to 40 % of the total debt amount. Professional settlement companies can get you the best out of the situation you are in. They have the experience as well as the knowledge to handle these negotiations.
Another major concern for debts if the tax they need to pay on the amount that has been settled by the creditors. In many cases the debtor is insolvent at the time of settlement. A settlement company can help the debtor in getting some tax benefits from this situation.
Cons:
The biggest drawback of using a settlement company is that it would cost you a fee. It can be as much as 15 % to 18 % of the settlement amount.
Credit Card Debt Settlements - Pros and Cons of Utilizing a Debt Settlement Organization For Help
