1.) Do it yourself
This can be a good option for the person who has one or two accounts that need to be addressed. Keep in mind that “settlement” does not include debt that is current, just debt that has been charged off or in collections.
Pros: This is a cheaper way to go and can be a learning experience.
Cons: Settling debt can take time and energy. A lack and time of energy might prevent you from succeeding at this model. Downloading a debt settlement letter online may not be as effective as you would like as this process is sophisticated and oftentimes better left to an expert with years of experience.
2.) Professional – short-term debt negotiation
Professional short-term debt negotiation is when a company works with creditors and collection agencies to negotiate cheaper settlement offers on your behalf. This model can be useful if you don’t have the time to deal with creditors and collection agencies and/or have multiple items that need to be settled on your reports and you don’t have much experience settling debt.
Pros: Depending on your situation, a company that specializes in debt settlement can save you time and money. Consider this – think of what you’re good at and think of the time and energy that went into you becoming an expert in that specific thing. Banks are experts at collecting debt and that is what they’re good at. For this reason, and depending on your situation, it might make more sense to engage a professional who settles debt day in and day out.
Cons: In most cases, services aren’t free.
Click here to hire a debt settlement company inside of Credzu.
3.) Professional – long-term debt settlement (or debt relief)
This type of company can help negotiate lower interest rates and terms with your creditors based on your ability to pay them back. Once they do that, you’ll make monthly payments to the company and they will pay the creditors for you.
Pros: This can be a good option if you have larger debt and find it tough and confusing to manage.
Cons: This process can take a long time and there are fees (though the goal is to lower your overall payments). Also, the negotiation process typically involves shutting credit cards down, which can hurt your credit for a while and cause you to lose access to aged credit.
Credzu does not handle transactions for this type of debt settlement company.
4.) Professional – Debt consolidation
Simply put, a debt consolidation company will loan you money to pay off multiple debts and then ask you to pay them back.
Pros: This type of service can be useful if you want to settle your debt, but don’t have the money you need.
Cons: It may seem cheaper in the short term, but depending on the arrangement and the terms of the payback, this can be very costly in the long run.
Credzu does not handle transactions for this type of debt settlement company.