Debt Settlement Issues

Debt Settlement Issues

It’s actually not tough by any means to find amazing claims for the credit card debt relief results that can be achieved by using the debt settlement process. Actually, the debt settlement companies generally claim that the debt reductions they negotiate for their clients reach as high as 70%. If these are actual results that are typical of what consumers can expect, you might be wondering why anyone with an unsecured debt problem, such as from high interest credit cards and personal or “signature” loans, would be thinking about looking elsewhere for a solution. The answer is that there are details not discussed in the advertising that, when taken into account about debt settlement, usually cast a totally different light on the subject. When it is evaluated from a broader perspective that includes these unspoken details, debt settlement emerges as a very risky, often stressful credit card debt relief solution that is probably ideal to the more extreme debt situations of clients who are willing to accept damaged credit as essential for the procedure. The dropout rate from these programs is very high, and this is another important consideration for those considering debt settlement as a solution for their debt problem. Unfortunately, these dropouts usually then find themselves in an even more difficult and complicated debt situation than they had originally.

Having been somewhat unspecific in nature so far, the unfavorable sources to debt settlement needs to be spelled out in detail for the benefit of consumers. Due to the fact that until a settlement has been reached with them all payments to the creditors are required to be stopped, therefore credit damage will always take place with debt settlement.

Another serious concerns is that as debt settlement results are dependent on the outcome of a legitimate negotiation process, the actual settlement results are variable and cannot be guaranteed. There are also instances in which the negotiation process proves to be unsuccessful, as some creditors will make very small concessions or simply refuse to accept an inferior amount on the debt. Judgements, wage garnishments and having the accounts delivered to collection can sometimes follow. Another aspect that is often overlooked is that debt settlement is adversarial naturally, instead of other debt solutions, such as credit counseling that work together with the creditors. Because the settlement company is working against the creditors, consumers are often harrassed with collection phone calls and can experience high stress levels during the process.

Mortimer Hudoba is a writer for Right Start LLC’s blog, which serves as an useful resource for the different debt relief help services available. He is also a professional credit card debt relief counselor with over 10 years experience.

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