In this article, you will discover:
- How settlement will affect your credit
- If you can use credit cards during debt settlement
- If your wages can be garnished during debt settlement
- How to rebuild your credit
Any debt can be settled. The real question is if the creditor will settle, what are you offering and will they think it is fair? Creditors do not want to bite off their nose despite their face. They want to know that if you are offering them something to settle, that you are being honest and making your best offer. If you are not, they might be unwilling to work with you after you violated their trust.
How Will Debt Settlement Effect My Credit?
Credit reporting is a really complicated rubric or metrics of calculations and formulas. It is difficult to say exactly how debt settlement might affect your credit. It will affect it negatively though, since you paid less that you originally agreed to pay.
Can I Continue Using My Credit Cards While Settling My Debts?
If you continue to use a credit card while talking to that creditor about settlement, they will not settle with you. Some companies will close your card as soon as you call to discuss settlement. If it isn’t closed and you continue to use it while discussing settlement, then it can be viewed similar to theft. If you continue to incur more debt with them, then they will expect you to pay the bill in full.
Can My Wages Be Garnished While I’m Settling My Debts?
Creditors can do anything the law allows them to do, no matter what stage you are in the collection process outside of mortgages. Mortgages have a different statute that might put some limitations on what the company can do at different stages of repairing a mortgage issue. All other creditors can sue you, garnish your wages if they already have a judgement, put a lien against your home, try to force the turnover of money from your bank account, and anything else that the law of your state might allow them to do.
How Can I Begin To Rebuild My Credit Following Debt Settlement?
Rebuilding credit is the same no matter what you are trying to build up from. It is different for every person. Some general things to do: Pay down the balance that is on every active account. You want at least 50% open credit at all times. It is suggested to keep it around 25 to 30%, in case you have an emergency and need to use your card. It shows that you are using your credit responsibly.
You can also get a secured credit card and never use more than 33% and always make on-time payments. Staying current also shows responsibility.
For more information on Debt Settlement in Illinois, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (847) 440-5998 today.