What is equity release?
Equity release is a way for older homeowners to access some of the money (the equity) that is within the value of their home.
- Why would you want to first settle the debt?
- What are the reasons somebody wants to settle the debt?
A lot of people have basically taken on a lot of money via credit cards to buy properties. And the odd occasion when they’ve needed money to buy an asset. They’ve also dipped into their credit card and actually Max their credit cards up. And they’re paying extortion rates of maybe 20%, 30%, 40% a year, even up to 50% of certain credit cards and they need to consolidate their debts by reducing down the amount of the borrowing they have.
Otherwise, what’s happening is the amount of profit they trying to obtain from what they’ve invested into is far lower than the amount of money they’re paying out on their credit cards. So quite simply, you have to really consider all these type of issues and do a quite detailed breakdown of the costs and the profits.
Will Settling a Debt Affect My Credit Score?
Yes, settling a debt instead of paying the full amount can affect your credit scores. When you settle an account, its balance is brought to zero, but your credit report will show the account was settled for less than the full amount.
Settling an account instead of paying it in full is considered negative because the creditor agreed to take a loss in accepting less than what it was owed.
Although settling an account is considered negative, it won’t hurt you as much as not paying at all. If you are planning on making a major purchase, such as buying a home, you may be required to either settle or pay in full any outstanding delinquent debts before you can qualify for a loan.
If paying the debt in full and final settlement is not an option, settling the account is typically more beneficial than letting it go delinquent or, worse, to default. When you settle the debt, the account will not be removed immediately from your credit report. If you were late on payments, the account will remain on your credit report for seven years from the original delinquency date.
If the account was positive, meaning there are no late payments in the account history, the account will remain on your report for seven years from the date it was settled.
Well, there are quite a few different settlements. One major one that we come across as an organization is something called shortfall debt, where banks taken a property, they sold it, and there’s a shortfall of negative equity property where the bank sold it and there’s that they can’t pay from that property. So that’s quite a dangerous one, because if you don’t pay that, the bank can technically put a charge on your house and you will then have to you’ll be in a position where you’ve got debt sitting on your house, which is obviously not good. So be careful!
So you’re better to somehow negotiate that debt or talk to us and we’ll negotiate for you the negative equity debt with the bank so that’s one form the other areas are where people have borrowed on credit cards and they need to borrow cheaper money against.