Uncover the truth behind the myth about debt settlement—you need to know the real facts before you make any decisions. Dealing with debt is challenging and often comes with stress, anxiety, confusion, and a heavy burden. The ease of accessing loans has made borrowing money simpler than ever through credit cards, personal loans, payday loans, and more. This convenience can lead to spending beyond our means, resulting in a never-ending cycle of debt.

Many people attempt to pay off their existing debts by taking out additional loans, which only adds to the debt with higher interest rates, trapping them in a cycle of increasing financial strain. Managing monthly expenses while trying to pay off debt can make escaping this cycle even more difficult. While overspending is a common cause of falling into debt, genuine financial hardships such as job loss, pay cuts, or unexpected medical expenses—especially in the wake of the global pandemic—can also contribute. One potential solution to address debt is debt settlement.

Common Myth About Debt Settlement

With mounting debts and accruing interest, options may seem limited. Start by creating and sticking to a budget. Avoid using credit cards and refrain from taking out new loans to cover existing debts. A practical alternative is to borrow money from family or friends, repay your debts with it, and then settle your obligations with them later. This approach prevents additional interest charges and reduces your debt burden. Professional options like debt consolidation, negotiation, or debt settlement are also available. However, several myths and misconceptions surround these professional solutions. Let’s address a few common myths to help clarify the process of debt settlement and guide you towards financial freedom.

Myth 1: My credit score will be negatively affected if I choose debt settlement.

Truth: When you stop making payments on your loans, your credit score will decrease, regardless of whether you’re enrolled in a debt settlement program. Your credit score will be affected by missed payments, but once you enroll in a debt settlement program and begin resolving your debts, your credit score will eventually start to improve. In summary, while your credit score may initially drop, it can be repaired with positive financial behavior over time.

Myth 2: Rebuilding my credit score after debt settlement will be difficult.

Truth: Rebuilding your credit score involves more than one factor. This myth is common among those new to debt settlement. Your credit score depends on your financial discipline and credit behavior. After completing a debt settlement program, practicing good credit habits will help restore your credit score.

Myth 3: It will be hard to get new loans after completing a debt settlement program.

Truth: Debt settlement aims to help you achieve financial freedom and develop financial responsibility. Once you complete a debt settlement program, you can apply for small consumer loans and manage them responsibly. This will help rebuild your credit score and improve your eligibility for future loans.

Discover how we can help you achieve financial stability with our best services, including credit card settlement, debt reduction, personal loan settlement, legal advisory and many more.

Myth 4: Enrolling in a debt settlement program will stop collection calls.

Truth: Joining a debt settlement program will not halt collection activities. Creditors have the right to collect what you owe, though they must adhere to the Reserve Bank of India’s fair practice code for debt collections (Master Circular RBI / 2011 -12/63 DBOD. No. FSD.BC.14/24.01.011/2011/12). Stay in contact with your creditors to inform them of your intention to repay your debts.

Myth 5: Anyone can settle their debt at any time.

Truth: Debt settlement is not a simple process; it requires dedication and discipline. Not everyone qualifies for a debt settlement program. Typically, eligibility is reserved for those facing legitimate financial hardships, such as job loss,
unavoidable medical expenses, or pay cuts. Proof of financial difficulty is necessary to qualify for the program.

If you’re experiencing financial hardship and considering debt settlement, reach out to our debt settlement experts at SolvFree at +91811433231. They can provide guidance and determine whether debt settlement is a suitable option for you.

 

 

 

Get Debt Free