‘Debt’ is a four-letter word, and if you don’t know what it means, you’re not alone. A version of debt is about your relationship with money, a sense of entitlement, and self-loathing. There’s also a healthy side to debt that needs to be told and understood. Budgeting is one of the hardest things to do, and for a good reason.
One thing that happens over time, for many people, is that your difficulties with debt can grow and affect you and your family. There can be newcomers to the improper use of credit, for instance, that can turn a small debit into thousands in debt in a matter of months. A vicious cycle develops, and it can be the hardest thing to break. But for those with a vulnerable credit history, one of the ways to break this pattern is to speak to a professional about your budgeting. Since this action is a relatively new topic, there isn’t an outline to follow, but, here we go!
Debt Settlement Option
If you cannot afford your debts anymore and you have not been making your payments on time, you stand a very good chance for a debt settlement. The settlement is fast and has little impact on your credit, but it may not be the best choice for you unless you’re up to date with all of your payments.
Debt settlement is different than debt management (paying down all of your debt). Settlement reduces how much you owe and how long you have to pay your debt. In most cases, it will get you out of around 12 months of payments. The major benefit is that people using debt settlement are paying off the principal instead of the interest.
The settlement does have a short impact on your credit score, but not nearly as short as a bankruptcy. A bankruptcy can stay on your credit score for up to 10 years, whereas debt settlement usually only takes a couple of years.
Make sure you consult with a couple of good, competent tax professionals to get a more detailed explanation of what your situations would qualify for.
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