The Pros and Cons of Debt Settlement

August 25, 2010 – 8:50 am

Debt settlement is like any type of debt management, there are pros and cons. A lot of consumers find that the pros far outweigh the cons and proceed with debt settlement. While debt settlement is not for everyone, it does work quite well for those that proceed. Despite its many successes, you should be aware of the pros and the cons before you decide that debt settlement is the right option for you.

The Pros of Debt Settlement

1. Debt settlement often allows for debt to be repaid within three years. 2. You’ll be able to build your credit back up in less time than you might have thought. 3. Your accounts may be brought to current status to instantly raise your credit score. 4. You can include most unsecured debts in your debt settlement. 5. Settlement will stop any more black marks from appearing on your credit so it will be easier to recoup your buying power once the debt is paid off.

The Cons of Debt Settlement

1. There is usually a monthly fee associated with debt settlement agencies 2. It is often difficult to achieve debt settlements on your own 3. Debt settlement is only available to unsecured debts 4. Debts will appear as settled instead of paid in full on your credit report 5. Creditors may sell the remaining debt to a credit agency so it will continue to be pursued.

As you can see, there are both pros and cons associated with debt settlement. Most consumers are able to look past the cons because the pros are so powerful. Again, debt settlement is not for everyone, but if you are not able to make your minimum payments and you are simply overwhelmed by your unpaid debts, it may be an option to seriously consider.

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