The benefits of negotiating a debt settlement agreement with your credit card company can be life changing. Below I list the benefits consumers often get through a successful debt settlement deal.
Benefit List
Large Reduction in Principal Owed
The typical credit card debt settlement results in the borrower paying 20 - 40 cents on the dollar. This is a huge benefit and greatly enhances the borrower's financial position.
No More High-Interest Debt
Typically if a consumer goes through with a debt solution such as this they include all their high-interest unsecured debt. Thus by the end of the venture, they have rid themselves of all such debt and are left with only their mortgage and car loans. Perhaps student loans as well.
Debt Income Ratio Improves
After getting rid of the high-interest unsecured debt the borrower will have a much better-looking debt to income ratio.
Improved Monthly Budget - More Free Cash
After paying off the giant credit card debt assuming the income level has stayed the same the consumer will have a sizeable chunk of their monthly income free to invest or pay off other debt such as their mortgage or student loans.
Improved Debt Management
After a grueling experience and fight that is involved in debt settlement the consumer will no doubt come out of the experience with a much better attitude towards smart debt management practices.
Avoid Bankruptcy
By successfully obtaining a debt settlement agreement the consumer will have escaped the other alternative which is bankruptcy.
There is no doubt that obtaining a debt settlement agreement that allows you to save 10's of thousands is a big financial benefit. However, debt settlement is hard and it is important that you understand the details of how debt settlement works as well as understand the risks and consequences of debt settlement.
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