Some Informations About Debt Settlement Company
Q: The interest rate of the debts vary anywhere from 7% to 29.99%. Approximately $9,000 U.S. of the debt is at 29.99%, the remaining anywhere from 7% to 19.99%. From what I understand, debt settlement can reduce the overall principal of the debt significantly through negotiation by the debt settlement company (by amounts such as 30%-50% on the dollar). However, (from what I understand) there is a catch- in the short term, one's credit rating will be harmed, as the balances from the creditors are being negotiated, which can cause the bills to be delinquent. But in the long run, one's credit rating will improve, as one gets out of debt through the 2-3 year payment plan. After the payment plan, the credit reporting bureaus will report that these settled debts were paid as agreed (rather than paid in full). Is this logic correct? Is there anything missing in the picture that I had just described, that I may have overlooked? Will this be a wise manner to handle this debt? I want to make sure that I give my friend the best advice possible. Any additional advice will also greatly be appreciated.
A: I would think that he could go to a credit union and get a signature loan for less than 29.99%. That is what is killing him, not the debt itself, but the absurd interest rates. I agree with posts- paying $900/month to debt is good. Can person increase this by 10-11% to $1000/month? That is what I suggest. At same time try to consolidate to a new credit card. Most will offer balance transfer