If counseling and bankruptcy won't fit, debt settlement may be an option

By Sam Craine on Aug 2nd, 2010

Debt settlement may be an option for some consumers, although they should also look at other options before taking part in it.

In a recent post on her website, financial expert Liz Pulliam Weston said that when people are facing credit card debt they cannot pay, they should consider setting up a meeting with a consumer credit counseling service.

These groups can determine whether a consumer will be able to pay off their debt within five years, rather than have to declare bankruptcy. However, the latter route may be an option, which is why she also said people should meet with a bankruptcy attorney in order to establish whether they are eligible.

"If neither credit counseling nor a Chapter 7 liquidation bankruptcy is a good fit for you, debt settlement can make sense," Pulliam Weston wrote.

However, consumers should keep in mind that settling debts will have an effect on their credit score, which could make it more difficult to qualify for loans or credit cards at a later date.

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