My husband signed up with a debt settlement program but we are pulling out after only 4 months in the program and have negotiated our debt with our creditors directly. The settlements are done…by me, not our debt settlement company.
Is it better from a credit perspective to settle on your own debt with your creditor, or since my husband signed up and then pulled our before they did anything will that also ruin our credit and/or show up on our credit report?
Is this as bad or worse than bankruptcy, or better? I’m very confused! The main thing is that we have to improve our credit and i need to know how to do it and what recourse I will have with the credit bureaus after the “fallout”. Thank you!
Working with a debt settlement company seemingly has the same negative effect as if you did it yourself. If you were behind on your accounts and settled them for less than the full amount, that will all appear on your credit report for seven years no matter who settled the accounts.
You have no recourse with the credit bureaus other than to dispute any debt that is not reported correctly or does not or did not belong to you. Any debt reported as being delinquent and paid off for less than the full balance sounds like that would be a factual statement and not removed.
At this point it really does not matter which approach is seen better since the settlements are done.
In order to rebuild your credit, see How to Rebuild Your Credit After Bankruptcy. It’s the same process.