debt management vs credit card settlement for my 73YO mother?
she owes 25K on Credit cards and unsecured loans. 1 option is debt management, a higher payment over more time but less Credit damage. Another is a settlement, less $ paid off sooner but seriously dinged credit. She still may move once in her life, meaning a lease or purchase. Suggestions?
- Debt settlement means deliberately defaulting on credit cards to attempt settlements. This is a risky tactic..whether you do it yourself or you hire a debt consolidation firm to do it. Creditors are under no obligation to settle and cannot be forced to do so, even if you default. Given the amount of debt the risk is high that the creditors would sue.
- Debt management means reduced interest and payments. Non profits firms like CCCS do not negotiate settlements…just reduced interest and payments..This would take a LONG time to pay off $25K…which could be an issue given your mother’s age.
- If she has no assets (house/savings) and SSI is her sole source of money, then she is judgement proof as SSI cannot be garnished for debt.
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- Debt settlement means deliberately defaulting on credit cards to attempt settlements. This is a risky tactic..whether you do it yourself or you hire a debt consolidation firm to do it. Creditors are under no obligation to settle and cannot be forced to do so, even if you default. Given the amount of debt the risk is high that the creditors would sue.
- Debt management means reduced interest and payments. Non profits firms like CCCS do not negotiate settlements…just reduced interest and payments..This would take a LONG time to pay off $25K…which could be an issue given your mother’s age.
- If she has no assets (house/savings) and SSI is her sole source of money, then she is judgement proof as SSI cannot be garnished for debt.
References :
The question is what she can afford. No point in making a plan if you can’t stick to it.
See how much she can allocate each month to paying her debt and decide accordingly.
References :
http://best-online-loan.com/debt-settling-service-diy-settling-debt