Critics often derived debt settlement as a one-way bankruptcy deal. Debt settlement experts are criticized as those individuals who want to be as cool as bankruptcy attorneys but cannot be because they are not qualified enough. Well, such a description is a very harsh on indeed.
The debt settlement model is compared to bankruptcy primarily because both the transactions have a significant negative impact on the credit score of the individual. If you are a very good borrower and if you have a very high credit score, you will find your status coming down to that of a sub prime borrower after you have gone in for a settlement deal.
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The settlement deal is just a one step above bankruptcy. The lenders are aware of this and that is the reason why they punish any and every individual who demands and obtains a discount to by remarking that the debt has been settled instead of for being repaid in full.
Well, there are certain points that you have to consider when you analyze and understand your credit score. For starters, your debts would not have come down to zero yet. This means you would still be under the burden of unsecured debt I will bet a lower one as compared to the past.
Hence, you cannot just run around blindly borrowing money as if everything is become all right. You will have to work in a discipline manner for the next twelve to twenty four months before you can claim that all your debts have come down to zero and that you want to borrow more money.
Now, don't you think you can repair your negative credit score and improve it by the time you reach the stage where your credit card debts come down to zero? Do you mean to say that twelve to twenty four months of concentrated effort to repair your credit score is not going to have any impact whatsoever?
There are many individuals who go in for a car or even a home loan after spending such a long time focusing on their credit repair after bankruptcy. A debt settlement, all sudden done, is a lot better than bankruptcy.
Hence, while your overall score will come down, you will have many options to improve the same, you will have the opportunity to employ professionals to do so, you will be in a position to afford their services and you will also find it easier to improve your credit score once you put your efforts into the task.
This is because a debt settlement, all sudden done, involve repayment of at least forty percent of the debt. That is not a small thing. Even the credit card issuers are aware of that.
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