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No More Mortgage on Realistic Expectations in Debt Settlement.

Debt settlement, like everything else, has positives and negatives.

If you have to go through debt settlement, do some research and get a realistic idea of what your expectations should be.

Your credit score is going to take a hit. It will most likely bit a considerable decrease to your credit score depending on how many debts are settled in the process. The first two years will probably have the harshest hit to your score. Although it will improve over time, it won't magically come back to where it was at the 2 year and one day point. Many debt settlement companies will tell you that your credit will be damaged for 2 years but have neglected to make it clear that after 2 years your credit will still be damaged. Some don't talk about the point beyond two years making it sound like it's only two years you'll have credit score damage.

You'll be signing a power of attorney. This gives the debt settlement company the ability to work on your behalf. You need to read it very carefully to make sure you aren't giving up anything you weren't planning on.

Payments to your creditors may stop. The debt settlement company will typically have you stop paying your creditors and start paying them the money instead which goes into a trust account. Then they pay themselves part or all of their fee, which is usually based on a percentage of the money they expect to save you. Their experience has shown them how much they need to pay certain creditors giving them an idea of how much they'll save you. They let your money build up in the trust account until they have a certain amount of cash they can make a settlement offer with to one of the creditors. Unfortunately some of your creditors could charge off your debt harming your credit even more while your money is building up in the trust account.

There are no guarantees. A creditor can choose not to accept the settlement offer and sue you. Just because you want to settle your debts doesn't mean your creditor has to go along with it.

You can't settle all types of debts. Debt settlement companies settle unsecured debts, which are debts with no real asset behind it. A secured debt would be a home with a mortgage or an auto loan with a car behind it. Unsecured debts are like credit card debt where you owe money for the use of the credit and it isn't for a specific item.

Anytime you about to take a large step financially you should do your research first so you know what you are getting into. And check the FTC and BBB for complaints before you move forward.

Your friends at No More Mortgage.

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