Debt Settlement Calculator
It can be difficult to determine whether debt settlement is right for you.
Below is a Debt Settlement calculator that provides your payment plan estimate and compares that option against other debt relief options such as debt management, payoff planning, Chapter 7 and Chapter 13.. We also include pros and cons to make sure you are informed.
Should you pursue debt settlement? Let's find out.
Debt Settlement Calculator Introduction
Debt settlement is a legitimate form of debt relief for individuals who cannot continue to pay their debt due to a financial hardship. That said, you should consider comparing the cost of debt settlement's monthly payment to your current monthly obligations. The debt settlement calculator below also helps you compare debt settlement to other options such as debt management, payoff planning, Chapter 7 and Chapter 13 bankruptcy.
Let's compare debt relief to your other options, including the cost to you and the pros and cons, so you can make the most informed decision.
Debt Settlement Pros
While debt settlement can be a great option for many people, let's chat about the pros and cons of debt settlement.
There are negative implications of debt settlement, but there are also many positive attributes for those who are struggling with debt and cannot continue to make ends meet. Let's go through the pros.
- Savings - Probably the most compelling is that you can save money and allieviate some financial stress.
- Flexibility of Payments - You are able to be somewhat flexible in how much you save eeach month into your escrow account.
- Time - You often get on a fixed payment plan and is much faster than continuing to make minimum payments.
- Bankruptcy - Some folks want to avoid bankruptcy, so it can allow the avoidance of bankruptcy.
- Flexibility in Financing - You may hve access to credit sooner than other debt relief options.
- Accountability - You often cancel your credit cards while in debt settlement, which produces accountability.
Debt Settlement Cons
With all debt relief options, there are a host of cons as well to consider when choosing whether debt settlement is rigth for you. Let's go through the cons.
- Negative credit score and report impact - Your credit score will often be negatively affected while in the program, especially before the debt has been settled.
- Lawsuit - Creditors may file lawsuit. This can often be avoided, but it still may happen.
- Late fees and interest - Before the credit card and personal loans go into non-accrual, interest and late fees may continue to accrue.
- Creditor specific - A creditor may not work to settle the debt.
- Taxes on forgiven debt - In some cases, there are potential taxes on forgiven debt. We highlight this information in this article.
Debt Settlement Alternatives
There are a number of alternatives to debt settlement. Each has it's own pros and cons, so understanding these pros and cons should help you make the right decision.
As with every debt relief option, we measure the severity of that option for your credit report and credit score. Each of the options have pros and cons, but the expensiveness of the options often decreases with severity.
Should I pursue Debt Settleement?
It depends. Debt settlement may be a good option for some, but definitely not for others. For example, in some cases, bankruptcy may be a more appropriate option if the debt is completely unaffordable.
In other situations, you do not need any debt relief and can get out of debt on your own through tighter money management.
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