Debt Settlement

Do You Qualify For Debt Settlement?

When someone is suffering from debt, their first instinct will often be to find a quick fix, something that will solve their problems as soon as possible. Unfortunately, the harsh reality is that the only “quick” fix possible for debt relief is to file for bankruptcy, something that no one should ever do without thinking it completely through. There are other methods of getting your debt problem under control and if you are committed to doing so, we suggest that you look into a debt settlement program, through a reliable debt relief agency that will work with you to get you out from under any crushing pile of debt and get your finances back on track.

Why Not Go For the Quick Fix?

The sad truth is that any agency or firm that promises any such thing will not be able to deliver what they promise, short of helping you file for bankruptcy. A lot of them will promise to negotiate on your behalf, settling your debt for pennies on the dollar, which is just not possible, especially in today’s economy. They will also promise to eliminate calls from creditors, which no one can do, except for the person that owes the debt and they will only stop if you make payment promises, with huge penalties.

The absolute worse thing you can do to yourself is to follow the advice to file for bankruptcy. Your credit score is already suffering, especially if you have past due debt. While bankruptcy is a legal option that many people undertake, and an effective one, it is also something that will haunt you and your credit for years to come. Any legal recourse will be reflected on your credit report as negatives for at least seven years.

Do You Qualify for Debt Settlement?

Even though this program can be a beneficial one for anyone having financial problems concerning their debt, it is not effective for everyone.

Requirements for these programs will vary from agency to agency but the average person who enters into a debt settlement program will often be carrying at least $10,000 or more in debt, most often credit card debt. Creditors may be willing to negotiate to lower your total debt if you owe less than $5000 and if they do, they will be far less flexible on other fees, such as interest rates.

How it Works

The first thing to do is to put together an accounting of all your current debt and your creditors. Keep in mind that debt settlement will not affect some debt, unless it is past due for at least four months. The agency will negotiate on your behalf with those creditor, so that the amount of debt you owe is reduced but it will not be eliminated. You repay at a more affordable payment rate, without penalty. This will take time, and while it may immediately hurt your credit score, its effect will be temporary and will reverse as you improve your payment history.