Credit Card Debt Settlement - Can I Afford a Lump Sum Payoff?

July 25, 2010 - PRLog -- Credit card debt settlement can be tough because the creditors of unsecured debts are very possessive about any debt amount due to them. One must also realize that non-payment of credit card bills is not done on purpose. There may be certain hardships that the consumer may be facing because of which he fails to repay his debt (which may also include failure of the creditors to send the bills to the debtors in the right time).

In such cases if the creditors try to coerce the consumers to pay the entire amount, the debtors may end up declaring bankruptcy. In order to prevent this situation, the creditors are generally open to credit card debt settlement than end up loosing all their money.

Legitimate debt settlement companies are the best to handle these matters. They know consumer protection laws and regulations well which prevents the creditors from taking advantage of the debtors. The debt settlement companies have been able to reduce unsecured credit card debts by more than 60% for hundreds of consumers throughout the country.

The debtor must keep this in mind that no matter how much debt from their total payable amount is reduced they 'have' to pay back some of it. Now the choice of repayment is up to the debtors, based on their source of income. It could be in the installment form or, the consumer may make a lump sum payoff.

While installment method can be convenient if the debtor still has a regular source of income, the option of lump sum payoff is affordable for those who have some tangible collateral to dispose. This may be taking loans against home, encasing or, taking loans against 401K etc. consolidation loans have also helped in certain cases.

There are a few benefits of lump sum payoff as opposed to installment method for credit card debt repayment. Firstly, the debtor can clear his debt at a go. He does not have to wait for months or, even years to clear it off. Once cleared, he may be eligible for more loans and cards in the near future. This may not be possible in case of installment-wise payment.

There are quite a few disadvantages of repaying the debt in lump sum. The consolidation loans are not without traps. The consumers considering this option should consult financial advisors and thoroughly check out other alternatives. Cashing 401K or taking loans against it is also not as easy as it sounds. Consumers may end up loosing more money than gain from it.

Therefore, in credit card debt settlement lump sum payoff can be a good option but, one has to be very careful about how one goes about with the process. It is certainly affordable for many who have the resources, but for the ones who don't, the installment method can be a valuable alternative.

Debt settlement companies are widely available in just about every state however some are just flat out more experienced than others in debt negotiation. That's why it's so important for consumers to use debt relief networks. These networks qualify and only accept the best performing debt settlement companies. To find a legitimate debt settlement company in your state check out the following link:
Free Debt Advice
(http://www.BestDebtElimination.com)
Contact us for free debt advice = 8886916918