Advantages of Debt Settlementt

Reduction in Principal debt amount

The debt settlement companies negotiate with your creditors
and the creditors reduce the principal amount payable up to 30-60 %.

Credit Report repair

By Debt Settlement you can improve your credit-report,
Chapter 13 Bankruptcy
or credit counseling program
that takes 5-9 years.

Negative Listing

With debt settlement plans some of the creditors also remove the negative listings.

Personal Privacy

In debt settlement you have privacy in the debt removal plan whereas in bankruptcy your case file becomes a matter of public record. The report can then easily be located by the future creditors.

Disadvantages of Debt Settlementt

Effect on credit report

The credit history gets
affected in negative manner when one opts for debt settlement but despite this
fact it is a better solution then bankruptcy.

Don't have the minimum required credit

There are some reputable debt settlement companies
that only accept you only if you have a minimum of &10,000 in your account.

Taxes to pay on Canceled portion of the debt

You might also need to pay taxes on the settlements. But if you have a positive net worth then the IRS will allow insolvent taxpayers to exclude cancelled debts.

Collection Activity continues and you might get sued

If you fall behind your monthly payments and are lacking financial resources to settle the debt with the creditors then the creditors take the case to a court. In such a case bankruptcy is imminent.