When it comes to pursuing relief from debts, individuals in Tennessee and elsewhere may have a variety of options to choose from. However, finding the correct path with which to pursue debt relief can be challenging, and certain options might not be as good as they seem. Those who wish to explore debt settlement as an option may find it beneficial to consider the potential downsides of a similar choice, as other outlets could prove much more viable.
At first glance, reaching a settlement for debts can seem exceedingly beneficial, as the amount may be significantly less than the original amount owed. However, while negotiating a settlement, past due accounts continue to fall behind, and creditors may continue to report delinquencies to credit bureaus. Once reported, these debts can remain on a person's credit report for up to seven years, which can have a devastating impact on one's credit score.
Before making the decision to settle one's debts, a person may find it advisable to consider his or her alternatives. One could attempt to negotiate a reduction in monthly payments with creditors, which could allow him or her to catch up and avoid potentially devastating consequences. Certain creditors may also have hardship programs that can assist a person who is experiencing severe financial concerns.
With numerous available options, deciding on a path can be a daunting task. Without the necessary legal experience, one might not even be aware of every available option, and a person in Tennessee who is in search of relief may find it advisable to seek guidance from an attorney. A bankruptcy attorney can assess a client's financial situation and provide assistance in choosing the correct path with which to pursue debt relief.
Source: thebalance.com, "The Dangers of Debt Settlement", Latoya Irby, April 18, 2018