Over the past few years, debt settlement has become a hugely recognized method of getting out from under a large amount of debt ($10,000 or more). Keep in mind that this type of program is strictly for those who are in financial distress. If you find yourself in a position where you can no longer make your minimum payments, a debt settlement program can set you up with a new structured monthly payment of about half of your current minimums. That new payment goes into a trust account managed by a debt settlement firm and continues to build a balance over time. As these funds accrue, they are used to settle your accounts one at a time for significantly less than what is owed.
The most common question that people have is will creditors really do this, and why would they settle for less than what is owed.
First of all, yes they do and they do it every day. The reason is because if you are truly in financial distress and the debt settlement negotiator has done a good job of getting that information across, the creditors understand that taking a fraction of what is owed is better than getting nothing at all. It is also more financially sound for creditors to take some money and call the account satisfied, than spend more money trying to pursue you when you don't have the means to pay.
Creditors consistently accept payments from debt management companies; in fact, they accept such payments every day. Think about it this way - if you are really in a financial hardship and your creditors know it, they'd be happier to get some money from you than none at all. That's what debt management companies help you convey to your creditors. Accepting less than what is owed also saves them the trouble of spending the time hassling you for full payments.
If you are considering a debt settlement program, be sure you ask the right questions up front. There are a great deal of debt settlement companies out there who are really only concerned with taking your money. Be sure you are working with one that is honest about both the good and bad of the program and is interested in making sure you understand what you are enrolling in.
There is also a lot of variance among the fees these companies charge. There are many companies out there that take their fees all up front which mean that your first 12-18 payments do nothing but pay fees. The best structure for you will be a company that takes their fees out over the course of the program, so that at least some of all your payments are going towards settlements right from the beginning.
In summary, a debt settlement program can be your best option if you find yourself falling behind on your bills unable to catch up. A good debt settlement program can get you out of debt in about 2-4 years. - 15465
The most common question that people have is will creditors really do this, and why would they settle for less than what is owed.
First of all, yes they do and they do it every day. The reason is because if you are truly in financial distress and the debt settlement negotiator has done a good job of getting that information across, the creditors understand that taking a fraction of what is owed is better than getting nothing at all. It is also more financially sound for creditors to take some money and call the account satisfied, than spend more money trying to pursue you when you don't have the means to pay.
Creditors consistently accept payments from debt management companies; in fact, they accept such payments every day. Think about it this way - if you are really in a financial hardship and your creditors know it, they'd be happier to get some money from you than none at all. That's what debt management companies help you convey to your creditors. Accepting less than what is owed also saves them the trouble of spending the time hassling you for full payments.
If you are considering a debt settlement program, be sure you ask the right questions up front. There are a great deal of debt settlement companies out there who are really only concerned with taking your money. Be sure you are working with one that is honest about both the good and bad of the program and is interested in making sure you understand what you are enrolling in.
There is also a lot of variance among the fees these companies charge. There are many companies out there that take their fees all up front which mean that your first 12-18 payments do nothing but pay fees. The best structure for you will be a company that takes their fees out over the course of the program, so that at least some of all your payments are going towards settlements right from the beginning.
In summary, a debt settlement program can be your best option if you find yourself falling behind on your bills unable to catch up. A good debt settlement program can get you out of debt in about 2-4 years. - 15465
About the Author:
This article was written by Jon Ochs, President/CEO of NCA Credit Repair, Inc, and a well respected authority on Credit Repair, and Debt Relief.
