People who are experiencing financial difficulty are faced with the dilemma on how to deal with debt. They can either opt to settle a debt or, they can choose to default on it. Any which way you look at it, in the long run, negotiating debt settlement is better than defaulting.
Defaulting on your debt means that you are one month or more behind in your monthly payments and that you have continuously failed to settle the minimum dues indicated in your billing statements. You may already have received collections letters or follow-up calls due to this delays in payment or for nonpayment at all. You have placed yourself in a situation where your debt becomes due immediately and in full.
You are also defaulting when you declare bankruptcy or when you have violated any of the terms and conditions agreed upon with your credit card company or lending agency. Failure or neglect to pay and settle your debt could lead to more serious consequences for you, unless you’ve considered negotiating debt settlement.
Any delay in making payments and any failure to settle debts reflect unfavorably on your credit standing. You lose your credibility with your creditors, and you lower your credit score. Filing for bankruptcy is often misunderstood as the easy way out but it is never so, because you badly damage and destabilize your creditworthiness for the next 20 years. That is so much worse than the humbling experience of being straightforward and negotiating debt settlement as early as possible.
The next 20 years is nothing compared to the way you will be forced to live and face your life a day at a time.
You may be denied certain privileges. With your bad track record, your accounts with insurance and credit card companies would not be renewed. Aside from that, all your loans would keep escalating at higher interest rates. With the option of openly negotiating debt settlement in an attempt to restructure and consolidate your loans, you would be able to make regular payments to maintain your credit standing while you keep interest rates low and fixed.
You will lose your credibility with your employers. A poor credit standing due to defaulting on debt would keep you from getting promoted. In the first place, it will keep you from finding a good job, because most employers do a thorough background check before hiring. No matter how qualified you really are, you cannot be considered for any position if you do not have the creditworthiness which reflects on your basic trustworthiness as a person. On the other hand, promptly negotiating debt settlement clears the slate for you.
You could lose your home if you are renting or buying a place. Apartment landlords and real estate sellers double-check on your credit reports before they lease or sell a house and allow you to move in. A bad credit standing implies that neither will you be conscientious or regular in your rent or mortgage payments. In contrast, smartly negotiating debt settlement makes loans available to you. Settling unsecured loans like credit card payments entitles you to approval for secured loans like mortgages and short term installment loans.
Simply put, negotiating debt settlement is the better option for you because it is the more credible one.