1. Initial Impact on Your Credit Score
When you start a debt settlement program, you might see a temporary dip in your credit score, especially if you haven’t missed payments before. This might sound concerning, but it’s a normal part of the debt settlement process. The short-term impact on your credit score is a trade-off for the long-term benefit of getting out of debt. Over time, as your debts are settled and you begin to manage your finances more effectively, your credit score can improve. Remember, the goal of debt settlement is to achieve financial freedom and rebuild your credit over time.
2. Credit Access Post-Program
After completing a debt settlement program, obtaining credit from certain creditors, especially Discover, can be challenging. This can be a hurdle, but it’s important to remember that it’s a temporary one. While some creditors might be hesitant to offer credit immediately after a debt settlement program, other lenders might still be willing to extend credit, especially if you demonstrate responsible financial behavior. This period is an excellent opportunity to focus on building a strong credit history with lenders who are more willing to work with you. Over time, as you rebuild your credit, you will find that more credit options become available to you.
3. Settlement Percentages Vary
It’s important to know that not all creditors settle for the same percentage. For instance, Discover may settle at around 70% of the debt, rather than the 50% that most other creditors might accept. This variation is normal and part of the negotiation process in a debt settlement program. The goal of debt settlement is to reduce the overall amount you owe, and our experienced team works diligently to secure the best possible settlement for you. Each creditor has its own policies and thresholds, and we tailor our approach to negotiate the most favorable terms possible for your situation.
4. Creditor Calls May Persist
During the debt settlement process, you might continue to receive calls from creditors until settlements are finalized. While this can be stressful, it’s a common part of the journey towards debt relief. Understanding that this is a normal part of the debt settlement process can help you manage the stress. We aim to minimize the duration and frequency of these calls though by securing settlements promptly and effectively.
5. You Are at Risk of Being Sued
One of the risks of entering a debt settlement program is the possibility of being sued by creditors. When you stop making payments, some creditors may take legal action to recover the owed amount. However, many creditors prefer to settle rather than go through the costly and time-consuming process of litigation. Working with a reputable debt settlement company can help mitigate this risk, as they can negotiate with creditors to reach a settlement before it escalates to a lawsuit. Regardless, when in a reputable debt settlement program, receiving a lawsuit is nothing to stress about. We have a litigation team that can assist you if it was to come to a lawsuit.
Why Choose AAA Debt Solutions?
Navigating a debt settlement program can be complex and challenging, but AAA Debt Solutions is here to help. We pride ourselves on being the most transparent company when it comes to helping individuals with their debt. Contact us today at 844-844-1909 for a free consultation and start your journey toward financial freedom.
