Weigh the pros and cons of getting settled.
Deciding to settle your debt for less than you owe is a big decision. While it can help you get out of debt for less than you owe, you must weigh the advantages of that versus the downside of the credit damage you’ll likely face. This guide can help you compare debt settlement pros and cons, so you can make an informed decision on the best way to get out of debt for your situation.
Debt settlement pros and cons compared side-by-side
Pros of Settlement
— Debt settlement is usually the fastest way to get out of significant debt without filing for Chapter 7 bankruptcy.
— Settlement is also usually the cheapest option since the average person pays just 48% of what they owe.
— You can avoid the fees and hassle of filing for bankruptcy.
Cons of Settlement
— Each debt you settle may result in a negative item in your credit report that will stick around for seven years.
— In most cases, debt settlement will result in at least some credit score damage.
— The settlement industry is filled with unscrupulous companies, so it’s possible to get scammed.
