The lack of information and knowledge of financial services among average Americans has engendered the proliferation of wrongly held notions about Debt Settlement. These notions have attained a mythical state and are now being peddled as the truth.
A myth according to the Oxford dictionary of English language is a widely held but false belief or idea, a misinterpretation of the truth.
Debt settlement is a debt relief method that allows a debtors obligation to his creditors to be renegotiated downward considerably, either using an intermediary (debt settlement company) or not and the remaining balance paid off for the pleasure of getting out of debt.
Here are seven biggest myth of debt settlement
1.A school of thought believes that negotiating for debt settlement is utterly unethical and must not be engaged in. This notion is common among Banks and credit card issuing institutions they tend to portray debt settlement as an unethical tool showing or demonstration lack of character. This is absolutely unfair and incorrect, circumstances often warrant the use of debt settlement irrespective of the fact that unscrupulous individuals also do abuse its use.
2.Another widely held belief about debt settlement is that credit report reflects unpaid balance on settled debt. This is farther from the truth once the amount to be paid has been agreed and subsequently paid off, the balance of the account becomes zero and the credit reports are updated accordingly. The amount forgiven is no longer reported as a debt.
3.Believing that debt consolidation loans, credit counselling, and debt settlement are one and the same is not true. Although each of this instrument is used as a strategy to obtain debt relief, they are however distinct and different from each other and have varying prequalification criteria.
4.To believe that only poor people apply for debt settlement is to believe a myth. More middle-income Americans are exposed to credit card debt since it is easier for them to obtain this loan than the low-income earners thus it is wrong to be that only poor or low-income earners apply for debt settlement.
5.Debt settlement is not and can not be a bad idea, believing otherwise is to believe the myth being peddled by banks and credit card issuers. Debt settlement is a smart financial move, rather than having those phone calls from debt collectors, it is better to enter a debt settlement process with your creditors. Note that most debt being defaulted are being sold for pennies on the dollar, so even though the collector is accepting a settlement they are still making several hundred percents on their investment.
6.Believing that debt settlement is the option for getting out of debt is a fallacy and it is not the truth. Even though there are various options and strategy for an individual, small business owner and corporation/organization to regain their financial freedom and become debt free. Debt settlement is one of the less stressful options available in the market.
7.The final erroneous belief system says that I can on my own settle my debt on my own. The number of technical skills and expertise involved in debt settlement will make it a wise decision to have a financial advisor/expert by your side while going through the debt settlement process. A reputable debt settlement company with outstanding years of experience will get you your desired goal of debt relief faster than you can imagine if you decide to go it alone