If you are in debt, you have no doubt heard the pitches from credit card companies telling you the solution to your problems is a balance transfer of all your outstanding debts to a credit card with a 0% APR introductory rate or a personal loan with a double-digit interest rate that will supposedly enable you to pay off all your outstanding debts. This instead traps you in a further debt spiral that ultimately leaves you in a worse position than when you began.

If you are serious about reducing your outstanding debts, then debt settlement may be a good option for you. Debt settlement is simply one of several different options you may have when it comes to paying off your debts. However, debt settlement is typically best for those who are serious about reducing their outstanding debts and learning valuable money management strategies at the same time. It is not the right solution for someone who is simply looking to cut the best deal to get his or her creditors off his or her back and to then open several other credit cards or take out additional loans and do the whole thing over again. Debt settlement works best for those who are looking for a fresh start and are ready to learn from their mistakes and do the right thing in the future to avoid getting trapped in a debt spiral again.

Debt Settlement: Not the Right Solution for Everyone

Debt settlement is not an ideal solution for everyone. If you have charged up thousands of dollars in expensive clothing, designer furniture and nights out with friends at fancy restaurants or clubs with no intention of paying your bills, then debt settlement is not right for you. If you signed up for a credit card with a 0% APR introductory offer and then proceeded to max it out and not pay back one cent of what you charged, then debt settlement also is not right for you.   

However, it may be right for you if you are in debt because something unfortunate occurred such as:

  • You found yourself without a job
  • Have tens of thousands of dollars in debts due to unexpected medical bills
  • Or some other period of financial hardship occurred to you

You want to pay back what you can on what you owe to your creditors and get a fresh start. In that instance, if you are serious but simply lack the means to pay them all back, then debt settlement may be the right solution for you.  

How Serious Are You About Reducing Your Debt?

Debt settlement works best for those who have made a commitment to themselves that they are ready to do things differently. They may have made mistakes in the past in their personal finances, but they are ready to turn a new page and put their past mistakes behind them. Everyone makes mistakes, and it is not something to be ashamed of if you are in debt because of some past mistakes or a situation outside of your control that occurred to you.  

However, debt settlement requires a different mindset than simply wanting to wipe your debts clean. Debt settlement requires changing your mindset when it comes to money and debt and learning a new approach to your personal finances so that you can avoid the same mistakes that you made the first time around. If you are ready to change the way you think about money and put what you learn into practice, then debt settlement may be exactly the solution for you.