Fix Your Finance with Debt Settlement

debtIf you find yourself being caught up with finance issues, like getting behind your debt payment schedules, you should know that there are plenty of ways to overcome them. Taking debt settlement is a good option.

Settlement is a good fix for debt issues and an alternative to bankruptcy. It can help you get rid of a lot of debt in an easy and more convenient way. While debt settlements may affect your credit score, it’s way much better than seeing lots of outstanding overdue debts on your credit report.

How does debt settlement work?

When you settle debt with a company, you offer to pay less than what you owed in exchange for having the rest of your debt forgiven. A lot of times, you can negotiate down to 30 or 20 percent of the total amount you loaned. But this financial fix is only applicable on unsecured loans (those that don’t involve collateral). Otherwise, the company would simply take the property you used as collateral when you couldn’t pay your dues. When you choose to go with debt settlement, expect that you will be asked to pay the agreed amount of money within just a few days. For this reason, you want to negotiate with just one company at a time. You really don’t want to be confronted with much more financial issues.

The primary benefit of structured settlement of debt is that it can clear up your debt much more quickly than paying it off, and at the same time, lower the amount of money you have loaned. It’s also a great way to end your financial sufferings, including not being able to pay your debts.

Still, debt settlements have downsides too. As mentioned, it negatively affects your credit score since the company will state on your credit report that you didn’t pay in full. Another thing –you can only use this financial fix one at a time. That means if you have you have other creditors, you still need to pay on them on time and on the right, full amount.

Settling debts wisely

The good thing is that you can use debt settlement in a more effective manner. Start by listing down all the debts you are currently behind on payments and how much you owe to each one of them. Try to save up to 50 percent of that amount, and then call the lender to offer an amount as settlement in full. Start with smaller amounts than what you have saved since you are still about to negotiate with the lender and the decision rests on them.

Once they agreed to your offer, ask them to send you a letter confirming that you have paid a certain amount as payment in full before you send them money. Keep such letter as it will give you protection in case the lender argues that you still owe them money in the future.

If you are not comfortable negotiating about debt settlement on your own, you can always seek assistance from a debt settlement company or a lawyer. These people are trained in this financial process and can make negotiate with the lender on your behalf. If you choose to go with a company, you won’t have to do anything but wait for updates. In return, you have to make monthly payments to the debt settlement company. In some cases, they will just take a fraction of the money you will pay to the lender to serve as your payment for their services.

You have to be careful when working with debt settlement companies. There are numerous bogus companies out there that will simply take your money. Choose a company that is accredited by USOBA or TASC. Recognition from any of these organizations means that the company has competence and performance capabilities to help you out.

[This is a guest post by Kathy Manson]

Wishing you well,

Daniel R. Murphy
Educating people for building wealth, adapting to a changing future and personal development.