Prons of settling Your Debts
1)You could be completely free of debt within 24 to 36 months so you can start rebuilding your credit.
2)You may be able to satisfy your debts for far less than you actually owe, representing a typical savings of 50% to 60% or more.
3)Some creditors may agree to re-age your accounts and bring them to a current status in order to boost your credit score right away (especially since your credit is probably not in good standing up to this point).
4) All unsecured debts and medical bills in excess of $1,000 can be included in debt settlement arrangements.
5)You can protect your credit report from incurring negative marks after you make settlement arrangements with your creditors. That is, you may be able to negotiate with and convince some creditors to go easy on the impact on your credit score going forward.
6)In most instances, your settled debts will no longer be subject to legal action or collection pursuits, so you don’t have to worry about debt collectors hounding you.
Cons of settling Your Debts
1) Some creditors won’t work with debt settlement companies and may even treat you more harshly if you use such third party services.
2) Debts appear on your credit report as “settled” instead of “paid in full” unless the terms are clearly negotiated with creditors.
3) Collectors can sell the remaining debt to another collection agency if your creditor does not send you a written notice as proof that your debt has been forgiven. You’ll need to keep a record of the outstanding debts you still owe.
4)Debt settlement companies are only allowed to operate in certain states.