Posted by Fred Lake

Debt Settlement Offer Response

Debt Settlement Offer Response

If you owe money to a creditor or a collection agency and you get an offer for the settlement of the debt, then it is called as a debt settlement offer. If you get a debt settlement offer it can be a savior for you but if you agree for something little than what you owe, then there can be some disadvantages to it as well. 

Sometimes, if you are unable to pay your debt, you can call up the creditor and ask him to settle down the debt. It is even possible for the debt to settle down without even asking for it. This occurs when the date of payment approaches but you do not make any payment since you cannot afford it. 

However, debt settlement offer is not for everyone nor is it applied in every situation. Creditors normally agree for debt settlement when they have the belief that the debtor will make the payment sooner or later. 

Evaluation of Debt Settlement 

The offer of debt settlement is hard to explain, but you should be contended with the debt settlement offer because it is lesser than what you owe and you should consider it as well. Experienced people say that if a debt settlement offer requires you to pay 40 to 60 percent of the debt, then it is very good. The amount of the settlement also depends upon the creditor thinking how will the money get recovered. 

However, a debt settlement offer is a very serious thing and you should be very careful when you sign the contract. Once you have signed the contract, you have to agree on the terms even if it is means to pay the amount right away. 

Is it possible to negotiate the debt settlement offer?

If you have received your debt settlement offer, it is not mandatory that there is acceptance for it. You always have an option of acquiring for a deal which is better than that. You do not have to think if you will get it accepted or not but you always have an option. You also have an option for settling for something lesser and if you will accept the offer, the creditor will also accept to report it as paid full instead of settled.

However, if you plan to negotiate your debt settlement offer, you must do proper research in order to understand each and everything properly. Make sure that you have everything written down in proper writing so that incase of any problem you have everything written down.

Is debt settlement a good idea or not?

It is true that a debt settlement relieves a debtor from paying his full debt and allows him to settle for anything lesser but there is more to it. People do not realize that going for a debt settlement offer can also lead you to a lot of taxes.

If you get relieved from paying debt but then you have to pay a lot of taxes then what is the point of settling even for a debt. 

Some other options to debt settlement offer

You might find these options important so that you can use them as alternatives to debt settlement.

  • Pay the full debt

If you have the audacity to pay your full debt, then it is best that you do that. Do not think about the debt settlement offer if you have and can pay your full debt.

  • For the debt consolidation loan

If high interests rates apply, then you can always opt for debt consolidation loan at a much lower interest rate. This way you will have the option to move high amount of budget to the principal balance as compared to the amount of interest. Apart from that, the only thing about which you will have to worry is the one single monthly payment and that's about it.

  • Filing for bankruptcy

If you have to pay a huge amount of loan and you cannot, one more option that you can use is to file for bankruptcy. This way, you will get some help and your problem of a huge debt will also be solved.

Fred Lake
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