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Famous Myths About Debt Settlement

George Sterling | Monday, October 8th, 2012

In an attempt to seek debt relief, many individuals opt for debt settlement. If you are piled under lots of debt, seeking debt settlement may help you in a way no other process can.

Debt settlement is a useful option but a lot of people don’t think of it as a viable choice because there are many myths about debt settlement that people believe in avidly.

If you are looking for debt relief and considering debt settlement, don’t believe in the following debt settlement myths:

  1. Many individuals believe that debt settlement will destroy their credit history by ruining their credit score. This is a popular myth about debt settlement that no one should believe because in reality, when you opt for debt settlement, the creditor will mention on your report that the minimum balance was settled for a lesser amount at first but you will be able to build your credit points if you continue making payments on time.
  2. Another popular myth about debt settlement is that it is very costly. Debt settlement does come with a price tag but its cost is not as high as it is thought to be. You can easily pay for the fee using some of your savings.
  3. People also believe that opting for debt settlement means saying goodbye to future credit acquisition. Again, this too is a myth and something that is entirely false. Once you are through with the settlement program, you will be able to rebuild your credit history and that too in a very short time.
  4. Debt settlement is also considered to be the same as reorganizational bankruptcy by many. Bankruptcy is entirely different from debt settlement because it eliminates your debt and puts a negative mark on your credit score. On the other hand, debt settlement does not affect your credit score and you can easily build your credit points even after opting for debt settlement.
  5. Lastly, people also tend to think that they need to have very high unsecured debt in order to qualify for a debt settlement program. This again is a myth because anyone with unsecured debt can opt for settlement. However, it is true that those who have more debt will benefit more from the program.
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