The Pros And Cons of Debt Settlement
Citibank is also one of the more difficult credit card companies to work with. However, they do offer several programs to consumers, including debt settlement in somewhat rare cases. So while they may not be easy to work with and it can be challenging to get help from them, it is worth a shot in trying to deal with them to reduce your credit card debt.
Although a debt settlement company may be able to settle one or more of your debts, consider the risks associated with these programs before you sign up: 1. These programs often require that you deposit money in a special savings account for 36 months or more before all your debts will be settled. Many people have trouble making these payments long enough to get all (or even some) of their debts settled. They drop out the programs as a result. Before you sign up for a debt settlement program, review your budget carefully to make sure you are financially capable of setting aside the required monthly amounts for the full length of the program.
The consensus with citi customers is that you need to let your credit card debt go unpaid for at least 120 days before they will consider settling. So while it is always risky to not pay a bill for that long, it may work in your favor over the long term. But beware of the risks in not paying for that long as there are still no guarantees to rececing help from the company. One customer had about $10,000 in debt with citi. They went about 60 days past due and citi said that they would only settle if they had a permanent disability or terminal illness. The person then let the bills go unpaid for about 70 more days (for a total of 130 days or so), and that is when a settlement was offered to them.
The pros of debt settlement
The university of phoenix is paying a record $191 million to settle a complaint filed by the federal trade commission accusing the for-profit university of using deceptive ads to lure students with the promise of future job opportunities with large companies such as at&t, adobe, twitter, microsoft and yahoo. The settlement includes a plan to cancel $141 million in student debts that are owed to the school by people who enrolled from october 2012 through the end of 2016 – the period in which the ftc says prospective students might have been duped.
Golde successfully negotiated his debts and saved nearly $150,000. On the other hand, having an experienced negotiator on your side can help. “you call and try to negotiate a balance, and it’s like, ‘get in line. ’” a card company’s attitude may be, “yeah, you and everybody else,” says ken clark, author of “the complete idiot’s guide to getting out of debt. ”based on experience negotiating with creditors, debt settlement companies know what percentage of debt owed each creditor is likely to agree to, gordon says. The pros also have more leverage with creditors due to their volume of business.
Here are the pros and cons of debt settlement. Remember, each person’s situation is different so understanding your personal finances, credit score, and economic situation will help you determine the best way to go. It can lower your debt amount significantly, leaving you with 25-65% of your original debt amount it may help you avoid bankruptcy having a concrete debt settlement plan may get creditors off your back and reduce stress bankruptcy and clearing all your debts may be a better option for you depending on your circumstance.
The cons or negatives of debt settlement
2. Your creditors have no obligation to agree to negotiate a settlement of the amount you owe. So there is a chance that your debt settlement company will not be able to settle some of your debts — even if you set aside the monthly amounts the program requires. Debt settlement companies also often try to negotiate smaller debts first, leaving interest and fees on large debts to grow. 3. Because debt settlement programs often ask — or encourage — you to stop sending payments directly to your creditors, they may have a negative impact on your credit report and other consequences. For example, your debts may continue to accrue late fees and penalties that can put you further in the hole. You also may get calls from your creditors or debt collectors requesting repayment. You could even be sued for repayment. In some instances, when creditors win a lawsuit, they have the right to garnish your wages or put a lien on your home.
Being burdened by debt is one of the biggest struggles we faced as a family. But these people at united settlement were very helpful in deciphering the different debts we had and then coming up with a debt consolidation planned dawn mercer october 29.
Some companies offering debt settlement programs may engage in deception and fail to deliver on the promises they make — for example, promises or “guarantees” to settle all your credit card debts for, say, 30 to 60 percent of the amount you owe. Other companies may try to collect their own fees from you before they have settled any of your debts — a practice prohibited under the ftc’s telemarketing sales rule (tsr) for companies engaged in telemarketing these services. Some fail to explain the risks associated with their programs: for example, that many (or most) consumers drop out without settling their debts, that consumers’ credit reports may suffer, or that debt collectors may continue to call you.
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