Jerry Cole asked:
Concept of a consumer debt settlement is to settle a debt with a reduced amount, negotiating with the creditor and to pay a lump sum payment. This type of plan is very effective for debtors who are not in condition to choose a bankruptcy. Benefit to a debtor in this type of settlement that he saves around 60% of his amount and yet pay a lump sum amount in return.
But if we closely watch through the details we will find that a process like consumer debt settlement is not a short term process and as it takes duration of 3-4 years to accomplish a debtor therefore get a reasonable time to save an amount to repay. On the other hand a company which makes effort for a consumer debt settlement takes 10%-15% as a reward of the service provided.
Most encouraging part in this state of affairs is that there are certain working groups which are working to assure that consumer debt settlement should be exercised considering strict code of business ethics in a very professional and healthy manner.
The only thing to watch out here is that even in a condition of settlement a creditor can sue his debtor to recover his sum of amount. Key to learn here is that this act is possible only if your installments are few and there are a couple of months left to go but if you have a huge amount still to pay and want a settlement there are fewer chances that your creditor will sue you and if you borrowed an unsecured debt then the chances for a law sue are nearly to zero.
Benefit for a creditor is that he will at least get a reduced amount which if in the case of bankruptcy and yet keeping an unsecured debt he will just get an egg to peel. Although it is for sure that any type of settlement does affect your credit score but as comparison to file a bankruptcy for a consumer debt settlement is a far better choice to make.
Mike
Concept of a consumer debt settlement is to settle a debt with a reduced amount, negotiating with the creditor and to pay a lump sum payment. This type of plan is very effective for debtors who are not in condition to choose a bankruptcy. Benefit to a debtor in this type of settlement that he saves around 60% of his amount and yet pay a lump sum amount in return.
But if we closely watch through the details we will find that a process like consumer debt settlement is not a short term process and as it takes duration of 3-4 years to accomplish a debtor therefore get a reasonable time to save an amount to repay. On the other hand a company which makes effort for a consumer debt settlement takes 10%-15% as a reward of the service provided.
Most encouraging part in this state of affairs is that there are certain working groups which are working to assure that consumer debt settlement should be exercised considering strict code of business ethics in a very professional and healthy manner.
The only thing to watch out here is that even in a condition of settlement a creditor can sue his debtor to recover his sum of amount. Key to learn here is that this act is possible only if your installments are few and there are a couple of months left to go but if you have a huge amount still to pay and want a settlement there are fewer chances that your creditor will sue you and if you borrowed an unsecured debt then the chances for a law sue are nearly to zero.
Benefit for a creditor is that he will at least get a reduced amount which if in the case of bankruptcy and yet keeping an unsecured debt he will just get an egg to peel. Although it is for sure that any type of settlement does affect your credit score but as comparison to file a bankruptcy for a consumer debt settlement is a far better choice to make.
Mike
