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Should I use debt settlement or DMP


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Hi,

 

I would like peoples opinion before I pull the trigger on any of these options. I have 40k in debt, 25k unsecured loan and the rest are credit cards. I was self employed and about 2 years ago my business collapsed and had no choice to use credit cards. I am getting back into track but paying the minimum and the initial loan amount is killing me. I feel like im being strangled and cant breathe due to these payments. I was never behind on payments until recently on a few cards, (less than 30 days).

 

I would like to know the people that decided to do a settlement how long did it take you to rebuild your credit and increase your score and how long did it take you to get a new car/home loan?

 

Thanks.

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What is your current credit profile and financial situation. That will play a huge factor on the which option is the best for you.

 

Debt Settlement (settling for less then owed):

  1. Usually have to be in default before creditors will negotiate.
  2. Have the funds available to pay the agreed settled amount.
  3. You can do this yourself as oppose to using a debt settlement company, what charges a large fee.
  4. Chances are if you default on the unsecured loan, the creditor will sue you.

 

DMP:

  1. Can negotiate a zero or very low interest rate and up to a 5 year payment plan.
  2. You would pay the full balance.
  3. Little impact on your credit.
  4. You can try to negotiate on your own or go to a non-profit consumer credit counseling service.
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They take all of your debts, as long as the creditor will work with them. If the creditor does not work with credit counseling, then you have to work directly with that creditor to hopefully get a hardship plan.

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