Common Myths About Debt Settlement
If you are currently behind on credit card payments or other debts, you might have started researching debt relief options. If you are considering debt settlement, similarly you may have begun looking into more about how debt settlement works. Like most types of debt relief that can be options for Georgia residents, there are many myths and misconceptions about debt settlement and how it works. Whether you are discussing debt settlement with friends or family members or doing internet research yourself, you are likely to come across common misconceptions that are presented as facts.
Our Lilburn debt settlement lawyers want to make sure you have the correct information you need as you consider options for managing your debt. Consider the following misconceptions about debt settlement that have become commonplace, along with our factual answers below.
Myth 1: Debt Settlement Will Ruin Your Credit
Fact: Debt settlement will actually do less harm to your credit than other forms of debt relief, such as Chapter 7 bankruptcy. As a report from CBS News underscores, debt settlement can lower your credit score. However, the amount that debt settlement lowers your credit score typically corresponds to debt delinquencies that already exist. Further, debt settlement harms credit much less than a bankruptcy filing.
Myth 2: Debt Settlement and Debt Consolidation Are the Same Thing
Fact: Debt settlement and debt consolidation are actually two separate things. Debt settlement involves negotiating a settlement amount with a creditor, with remaining debt forgiven by the creditor once the debtor makes the payment. Debt consolidation involves consolidating all debt into one payment and repaying all of the debt over time.
Myth 3: Debtors Can Easily Handle Debt Settlement Negotiations without a Lawyer
Fact: Debt settlement negotiations can be complicated, and it is important to work with an experienced lawyer. A debt settlement lawyer also may be able negotiate an agreement with terms more favorable to you.
Myth 4: Debt Settlement is Only Appropriate for High Amounts of Debt
Fact: You can in fact settle almost any amount of debt once the debt has become past due. Whether you owe a few thousand dollars on a credit card or tens of thousands for a personal loan, debt settlement may be an option.
Myth 5: Debt Settlement Will Require You to Pay Most of Your Debt Over Time
Fact: Most debt settlement agreements involve a one-time lump sum payment from the debtor for a percentage of the debt they owe. Then, the remaining debt is forgiven by the creditor — this is part of the debt settlement agreement.
Contact a Lilburn Debt Settlement Attorney
Do you have questions or concerns about debt settlement? Or are you ready to get started negotiating a debt settlement agreement with your creditor? Whether you still have questions or want to begin working on a debt settlement agreement, an experienced Georgia debt settlement lawyer at Konn Law Firm LLC can assist you. Our firm has years of experience representing clients in the Lilburn area and can discuss your financial situation with you today.
Source:
cbsnews.com/news/debt-relief-myths-you-shouldnt-believe/
