[compilation video of locksmith and boat guy here]
Most of you reading this have a substantial amount of debt and want to know the details about debt consolidation and debt settlement. Let’s discuss the option of debt consolidation first. One important thing to know is that even if you’ve gone for months not making a single payment on your loans, there’s hope. It may even allow you to pay off your debts faster. I say this because when a credit card company sees multiple defaults, they are more likely to negotiate at the bargaining table. Plus, after 5 months of missed payments a credit card company might be willing to negotiate and forgive a larger portion of the debt than if there had been only 3 months of missed payments. They may even give lower than usual interest rates for fear of you bailing out and not paying the debt at all.
In the case of debt settlement, multiple missed payments is just part of the process so it is a non-issue. This is true because when you enter into a debt settlement program you will be asked not to make payments for 6 months. This term of planned default is so you can pay into an escrow account. Then the money is dispersed to your first creditor. As a creditor is being paid the other creditors will wait in line until the one before is paid the settled amount. It should be said that if you default on payments for more than 180 days before contacting a debt settlement agency, you run a higher risk of being sued. You may be sued anyway but that happens only 3% of the time.
Whether you choose debt consolidation or debt settlement they are still black spots on a credit report: debt settlement being the worst. It lowers your FICO score the most and could prevent you from refinancing your home. Think about it. If the rates go down by 2 points, you wouldn’t be able to take advantage of the situation. But let’s say that a few years pass and you’ve shown good credit patterns. Your score will then rise and automatically qualify you to refinance.
Looking at the first video clip near Summerville, South Carolina we can see a hardworking guy who has chosen debt consolidation. But halfway through the video a debt collector calls and he quickly gets flustered. Debt collectors are back into his life because he obviously missed a payment. With his lump sum payment of $600/month it’s easy to see how that could happen. But had he chosen debt settlement his payments would have been around $160/month. This is by far more manageable, giving him more leeway to build his life up again.