Debt Settlement Software: Pros & Cons - Is It Right for You?

Debt settlement software can guide you through the process of reducing your debt burden without the costly fees paid to a settlement service. Many debtors would prefer to use the software for personal reasons, in addition to financial reasons. They would like to maintain absolute control over the situation, and some are even uncomfortable discussing their debt with debt counselors. Ultimately, while software does have its advantages, it has serious shortcomings when compared with an alternate service.

Inability to Answer Questions

The number one problem with using software, instead of a counselor, is the fact you cannot get any questions answered. When you speak with an agent, you will have time to ask questions about your debt burden. You can discuss concerns you have about your unique situation. Debt settlement software relies on a process. This means it treats every borrower essentially the same, regardless of the type of debt the borrower has, or reasons for debt problems. Ultimately, there is very little customization. The software relies on the philosophy all debtors can be taken through the same steps to achieve similar results.

Potential Misses with State Laws

Software is designed to ask you where your debts are located and accommodate for state laws regarding debts. However, these issues are always more complex than a simple "yes or no" answer. When you file taxes, you can use an automated software to get relatively comfortable results in your state. Or, you can use an accountant to look for specific advantages you may have to decrease your tax burden. Debt settlement software is similar; it does not use past experiences to turn you on to unique advantages or problems you may face with state laws regarding debt. You may learn you could have saved more money if you had taken the time to explore legal boundaries further.

No Loan Options

You may need to take a loan in order to settle your debt. In most cases, borrowers take a new lump sum loan in the amount remaining on the existing debts. This allows the borrower to pay off all debts at once, close the loans and move forward with one debt note in the future. When you use debt settlement software, you may have to go to another party for the actual loan. This can complicate the process. Since you will be going to the debt settlement lender anyway, it can make sense to handle everything in one place.

Failure to Finalize Process

Without an agent assuring property liens have been removed, you may wonder if everything was done right. You will have to continually follow up with any registrar holding liens, such as those on your home or automobile, to make sure they have been lifted. You will have to monitor your credit for years to assure these liens do not continue to harm your credit. If you find something has not been closed properly, you have little leverage without an agent. Most debt settlement services come with guarantees that would make them liable if something is not properly finalized.