If you are like many people who are having financial difficulties and are trying to find a way to stay afloat, there are a few options. You can work with your banks on a debt settlement at minimum, or you can file bankruptcy and restructure your debt. In this article, I will explain the consequences of debt settlement that will affect not only your credit score but possible future ramifications. Debt settlement is generally an agreement made by a lender to a debtor in order to pay off a certain amount of the outstanding debt. The amount can be between 20% and 75% of what is owed. However, there are certain things that a debtor must watch out when trying to decide what to do. First of all, many people do not realize that a bank or lender would much rather a debtor work out a debt settlement agreement where they would some of their money back, rather than have the debtor file bankruptcy. If a debtor files bankruptcy , and the lender is an unsecured creditor, it is very possible that they could end up with nothing as the secured lenders are reimbursed first. However, debt settlement agreements
(more...)