There are a few benefits of using this.
- You can get a lower debt amount.
- They help you to neglect unable to pay debts.
- You can take help from the creditor as well as collectors off your back.
- It is an extremely simple as well as easy process.
- Another process can take 2-3 years to debt-free. But it is only one process that is faster than the other methods.
- It is cost-effective.
- It has a big track record of their success.
- It will truly remove debt if the customer sticks with the program. It means giving the monthly payments as agreed upon as well as communicating with the debt relief provider throughout the program.
There are few risks as well as disadvantages of using this.
- Sometimes your creditor does not agree with the bargain. There is no guarantee that the company will be to do a successful settlement for all your debts.
- If you want to stop making a payment on the debt. You can stop it by paying a late fee or interest. There is also a chance for facing collection effort as well as a lawsuit filed by a creditor or debt collector.
If the company bargain a successful debt settlement, the portion of the amount that they forgive could be taken as taxable income on your federal income tax which means you have to pay taxes on them
- If the company can not collect a fee until they have made a settlement agreement in which you have to agree on the settlement. You also make one payment to the creditor as a result of the agreement.
But you still have to pay some money to the company as a fee. Their charge will be a few amounts of the forgiven amount. If you have taken a loan from five to six creditors. The company that settles one of those debts can start charging their fees as soon as they are getting a result.
- A settlement company told you to stop making payments to the creditor. But at this point creditor will not agree to any agreement, it means all the payment which are not paid by you can wind up as lawbreakers account on your credit report.
- Your credit score gets negative effects as a result of lawbreaker payment as well as the creditor will also send your account to the collection office.