Posted on May 28, 2009 at 9:02 am Who really should settle their debts and why would someone want to do this?

Posted on May 28, 2009 at 11:30 am People who are trying to avoid filing bankruptcy should look into debt settlement as a way to resolve their debt problems. More specifically, individuals who are behind on payments and owe a lot are an even better fit for debt settlement. The reason for this is that the creditor has no incentive to negotiate settlements with people who are current on the debts because they are still profiting from the interest they collect each month. I am also aware that some people voluntarily fall behind on their monthly payments to try and negotiate at a later date. I would say that this would only make sense if the debt amount is extremely high, the interest rates are high and there is no light at the end of the tunnel. With that being said, every scenario is different. Can someone give an example of someone who is a perfect fit for credit counseling? Usually most people are trying to figure out between the two what is a better fit.

Posted on May 28, 2009 at 12:21 pm Someone who can make consistent monthly payments, has a fairly low debt amount $1-10 K, and needs there interest rates lowered to pay down the debt faster is probably a decent fit for credit counseling.

Posted on May 28, 2009 at 1:33 pm Yes, the person definately needs to have a steady income, because a credit counseling agency reserves the right (because ultimately they are run by the creditors) to remove you from the program for just one missed payment. These programs last 5 years, so if you are not completely confident you can afford 60 payments at the price they quote you at, don't go for it.

Posted on June 1, 2009 at 11:26 am If you have any accounts that are past due you may want to consider settling your debts. If any of your accounts are in collections or with debt buyers you may also want to try and settle. Also, even accounts that are past due and placed with an attorney can be settled. Old debts are prime for debt settlement. For example, if you have a credit card account that you haven't paid on in over a year, you should definately be looking into your debt settlement options. Not only can you finally resolve the debt, but if you do in fact settle the debt it will be reported as such on your credit report, which is a better mark to have than an outstanding balance that has been delinquent for the aformentioned period of time.

Posted on July 20, 2009 at 11:25 pm Given that, does it necessarily apply that having a higher debt amount means more eligibility for a settlement?

Posted on July 21, 2009 at 9:59 am Well typically yes. The more you owe the harder it is to pay it off or satisfy the debt without considering bankruptcy. Since settlement is a bankruptcy alternmative, a lot of people with higher debt amounts consider settlement as a better debt relief option. And furthermore, the majority of debt settlement companies have a minimum amount of debt (usually $10 K) required to enroll someone into their program. So the question originally asked- who should settle their debts?- has many answers, but one of them may be those with particularly high balances who need an alternative to filing bankruptcy.

Posted on July 23, 2009 at 3:06 am i have a question too, f my account has been charged off by my creditor, can i still be eligible to settle for my debt? it's been really hard for me to deal with all of these and i hope you guys can help. thanks so much

Posted on July 23, 2009 at 3:52 am You can actually have a sweeter deal with your lender if you settle your debt when it's charged off. As far as I know it's best to settle debt if the amount is higher, say around $10k. If the debt has reached that kind of stage in delinquency, I believe that you can get a higher savings amount. Like I've heard of a 25% settlement rate. But that doesn't necessarily apply to all.

Posted on July 23, 2009 at 7:32 am People with charged off debts should are definitely a "yes" to the original question of who should settle their debts? As Julie mentioned, a lot of times once the account has been charged off the collector who is handling the account will open up the door to lower than average settlement offers. And at the same time Julie is right by stating that it doesn't apply to all lenders (or people with charged off debts), as some third party collectors can be difficult to negotiate with depending on who the original creditor is.