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A Debt Settlement Program May Be For You

28th February, 2010 - Posted by Sean Horan - No Comments

What is the best way to go about getting out of debt?  To someone who is being buried under a mounting stack of bills and is struggling, the options can appear to be overwhelming.  It is very common to become paralyzed with indecision, which delays your decision to get the help you need.  A good debt settlement program can help you find the clear answers you are looking for and start you on your way to being free of debt.

Some debt relief programs can help consumers by reducing interest rates.  Debt settlement however involves a negotiation of the total amount outstanding.  The total amount you owe is reduced, not just the interest rate.  If you owe $10,000, you may only pay $6,000 or $5,000.  This is beneficial for those who are struggling with their bills and need a solution.  Your balance becomes more manageable.

You pay your bills.  No one likes paying bills, but not paying you bills is far worse.  With debt settlement, you acknowledge your obligations, negotiate, and pay an amount that your creditors agree on and that is affordable for you.

Unlike consolidation, you are not rolling all your bills into one big loan.  You are reducing the total amount you owe so you can become free quicker and with less of an impact on your financial situation.

You can pay off your bills in one to four years.  By paying the minimums on credit cards and other debts, you are extending the amount of time you will be paying.  What starts as a $1000 credit card bill can turn into $1500 or even more before you know it has even happened.  Debt settlement lets you to move faster towards your goal of paying off your balances, saving you untold amounts of money in interest, late fees, and other related charges.

You don’t have to declare bankruptcy.  A bankruptcy will stay on your credit report for at least seven years, making it more difficult to get a mortgage or low-interest lows.  In the debt settlement process, your credit score drops to begin with, but you begin building it back up.  Instead of a seven year black mark, you have a drop in your score for about a year or even less depending on your debt.  After you have completed your program, you’ll see it rise again.

While you are in a program, many creditors will re-age your account, which means that it is current instead of delinquent.  This helps your credit score as well.

When you become part of a program, you will likely see a reduction if not an end to the calls from creditors.  They will begin communicating directly with your firm, and if they do call, you can direct them to your firm.  Your creditors are not required to stop calling you, but they often do when they learn that you have started a debt settlement process.

There is a lot less stress when you have a solid plan for your financial future.  One of the worst parts of being in debt is the feeling that you are helpless with no where to turn.  A debt settlement can help you regain control of the situation and learn to make better financial decisions in the future.