What are the implications of using a partial settlement to clear a debt?

Question

I wrote to all our creditors recently to offer a full and final settlement figure for our debts. Most turned the offers down, but one accepted and one offered to consider us for a partial settlement. I would like to clear some of these debts, but I don't really understand the difference between the two options and I'm worried about the implications for our credit in the future. Should I just ignore the partial settlement offer or is it worth considering?

Answer 1

Two articles in my resource box talk about debt settlement vs. debt consolidation. Check it out. Hope it helps!

Answer 2

What is more inmportant? Your credit rating or getting out of debt? If you settle a debt with a partial payment, the creditor can report that the debt was settled to the credit bureau. This will affect your ability to accumulate more debt for a while....

Answer 3

Be careful if they have offered you a partial settlement you will probably find that they continue to charge you interest ... find out if it is a partial settlement to clear the whole debt

Answer 4

If you take the settlement they can still report the bad history on that debt on your credit report for up to 7 years. Which will continue to effect your score and your ability to obtain credit in the future.If you pay off the full amount you owe they legally have to remove it from your report completely.

Answer 5

As long as they agree that the whole debt will be cleared, the only difference is that your credit report will read "settled for less than full amount". I'm not sure how that affects your credit score.

Answer 6

except your expenses are heavily in default (no money for years), the lenders won't decrease your stability by potential of an substantial share. Get a factor time job handing over pizza an you are able to repay the enjoying cards in 2 years.