Debt Settlement. Does it work? Absolutely. Is it for everyone? Absolutely not.
The best way to find out whether or not debt settlement is right for you or not is to take my free debt exam at www.FreeDebtExam.com .
Debt settlement is for those who are either behind on their bills, or foresee themselves going behind on their bills within the next 5 years. If you are making more than your minimum payments, preferably double your minimum payments, than this debt strategy is not for you. If you are paying more than minimums, than I would recommend either Credit Counseling or the snowball method.
If you’re behind on your bills or foresee yourself going behind than you may want to examine a debt settlement program. There are some things you need to understand about a debt settlement program before joining, so listen up!
Do your research! Before joining any company to handle your finances, you should check their ranking at the Better Business Bureau. Don’t be so concerned with the grade that the BBB gives, but pay close attention to HOW LONG the business has been around.
You also want to check to see if there are any complaints, and whether or not those complaints were resolved. While it’s rare to see a company that’s been around for a long time with no complaints, if the company is responding to the complaints and addressing things with the BBB, it shows they care about their reputation, which normally translates to them caring about their customers.
A debt settlement company helps you negotiate your UNSECURED debts with your creditors. You are not current with your creditors and it is not good for your credit when you are in a program like this.
Who it’s for:
I recommend debt settlement for those who have over $7,500 in unsecured debt who:
See themselves falling behind OR Have missed more than two or three payments in the last year, and are currently behind.
Have not paid their bills in 3+ months( it may NOT be beneficial for you to settle debts with your creditors if you are passed the statute of limitations in your state)
If you live in North Carolina, Texas, Florida, or South Carolina, the laws are more in your favor. Click on your appropriate state to find out why. If you are self employed this may be a better option as well, click here to find out why.
What happens.
In a debt settlement program you are saving money so you can settle with your creditors ONE AT A TIME, with lump sum settlements. YOU SAVE THE MONEY. You are hiring a company to negotiate your debts for them. Typical fees for these programs is between 13 and 18%. Your settlement company will tell you how much money you need to save every month in order to get out in X amount of months. Most programs are for 36 months, however in some states you may be able to stretch out your program to 48 months. Depending which company you join you will save the money in your own bank account, or in an escrow account set up by the settlement company. Your accounts will be placed in order of desired settlement, and when you reach the amount needed to settle the next account, your settlement company will negotiate the deal, and get in touch with you. You then repeat the process over and over again until you have settled out all of your accounts. Settlement can be the quickest and cheapest way to get out of debt aside from bankruptcy
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