Whenever you set up any form of debt settlement agreement with your debtor or your credit card company, your chances for obtaining reliable credit in the future from the same company is considerably reduced. In addition to this, such a step will also impact your overall credit score in a negative direction. The process of debt settlement basically calls for offering the credit card company with a negotiated settlement that aims to convince the company to accept a payment much less than the final debt payment or the total owed amount. Well though many of these processes are successful in relieving the consumer of all his or her debt obligations and also in preventing the lenders from selling any future debt to the collector, however most of them tend to leave your future financial story with a black mark for the next seven years at least.
Indulging with a Debt Settlement Company
Though it is easy to directly offer your debtor or collector with a settlement offer, however, the one made by a professional debt settlement company is bound to have more effect on them on your behalf. But most of these companies charge a particular fee upfront for the negotiation and generally include it as a part of the final debt amount which they will collect from you at the end. In such a manner, you tend to pay them the amount directly instead of paying it to your actual debtor. From the company’s perspective, this is not a bad deal as they will be eventually obtaining some amount from a client who was earlier not able to pay extremely anything. Keeping the perspectives on both the sides, it therefore becomes mandatory for you to keep your credit available in either case.
A lot of debt settlement programs provide you with an option to completely leave out your credit but this may or may not be mandatory. Once you are in the middle of the negotiation process, it is always a good idea to keep some credit available at your side. However, you must make sure that the credit card you decide to keep active does not belong to the company or collector whom you owe the debit. Moreover, in many cases most of the credit card companies will demand a complete surrender of all your credit cards issued by them in case of huge bet situations.
Since you need money for your survival, therefore, you cannot simply afford to surrender all your credit cards and money towards the settlement or elimination of your debts. There is absolutely nothing wise in borrowing more money for your everyday survival while the money you own goes in clearing all your previous debts. This way you are only inviting more dents to your future. Keeping this in view, keep an account or credit with a low balance or low amount which you can use while you are stuck in the debt clearance process. However, make sure that the credit you choose satisfies the condition of minimum low balance so that it does not invite any form of debts. When you make all your supposed payments at the right time and maintain your account at the minimum required balance, no company will ask you to remove your credit account.
Therefore, keeping one of your credits available or active during the complete debt settlement process is not a hard task. In addition to this, such as step will only help in boosting and helping in restoring your financial conditions back to normalcy after you have cleared all your debts.