“Settling” with a creditor is *tantamount* to not paying the debt and having the creditor write the debt off. A friend, who received poor advice, settled with a creditor (she paid off others and is now totally debt free) and was told when she went to look for an apartment (after selling her home) that her credit was very poor – due the settlement.
It is viewed as by potential creditors, landlords, employers, etc. as worse than a bankruptcy. Their viewpoint is that you were extended credit and reneged. Most bankruptcies are usually because of catastrophic situations, and are viewed much more benignly (relatively speaking) than settlements. Sometimes your last resort is to to opt for online payday loans (no credit check) and pay the most urgent bill.
Please be sure to get good advice – perhaps calling a loan officer or branch manager – or even a credit reporting agency to educate yourself on the ramifications of your financial decisions. Of course, Dave Ramsey, Suze Orman and Clark Howard all have books, websites and radio shows that can be a resource for you.
Best of luck.
Think about this from the perspective of the creditor for a moment.
You have lent money, they are making their payments. They approach you saying “we owe $100, but we’ll pay $50”. What would you do as the creditor?
Many credit counselors (some reputable, some not) say that you will have a better chance of settling if you have late payments and other signs of financial difficulty.
I do not recommend debt settlement because it will reflect on you worse than bankruptcy, stays on your credit history just as long, and still costs you 50%+ of the owed amount. If you really can not pay your debts, seek help from an advisor or counselor to put yourself on a spending plan. Then you can create a debt repayment plan and pay off your debts.
If you cannot possibly pay off your debts, even after creating an absolutely minimum, bare bones spending plan then consider bankruptcy.
instead of debt settlement. Like I tell my clients, I do not advocate bankruptcy, but sometimes there really is no other choice.
We too are considering debt settlement, sounds better than bankruptcy. Still deciding on alternatives.
trying to figure out what we can afford. Haven’t heard anything terribly bad about it, nor anything really good. As far as a creditor sueing, they have that right, I think it depends on who you have negotiating for you. Don’t have any real answer yet. I want to hear from someone who has successfully done this. Know of someone who has done this…something. signed, Totally in over my head.
Whatever depth you are in, do not panic. Just make sure each company is aware of your situation and give a percentage of what you can afford in proportion to what you owe. I have done this over 5 years (owed £36 000) and finish in 5 months..
I have recently learnt that if you get a discount to clear a sum you owe don’t do it.. it will be held against you.
See it through and there is an end. Just make sure you are open, honest and communicative highly communicative and you will be fine. My highest repayment was £106 and my smallest was £4.03 but they all got paid and all expire at the same time.