Resolving debt problem is a challenging task. Before you commit to any financial option, it is indeed important for you to know the pros and cons of the options so that you won't make the wrong choice as it may affect your future. A financial solution will help to improve your credit rating. If you are considering debt settlement, here are some useful tips for you.
There are important points you need to take into serious consideration:
•First thing first, assess your financial position. Determine whether you have the ability to pay off your debts with your current income. If you have zero income due to loss of job, do you have saving in your account? If you don't have both, then settlement is definitely not right for you.
•Secondly, find out whether you are qualified for debt settlement or not. In general, a person in debt will only qualify for settlement if he or she owes at least USD7, 500 in unsecured debt.
•At the initial stage, your credit score will be affected by the settlement plan. Are you aware of that? In general, for people who solve their debt issues through this method, it will be shown in their credit reports for 7 years. If you can't afford to have bad credit score and negative items in your report, then you shouldn't choose this debt solution.
•You are reminded that if you have successfully settled your debt, the forgiven debt amount is taxable. As a result, are you ready to pay the tax?
•You need to decide whether you would like to go for this debt reduction on your own or you would like to appoint a service provider to work for you. If you are doing on your own, you must be prepared that you need to spend quite a long time to solve this matter. However, if you appoint a company to do so, although you can have a peaceful mind, you need to bear the service fee.
No matter how stressful and worried you are, you must be calm and cool when selecting your financial option.
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