Debt settlement companies could be blessings to people who are reeling under heavy sums of debt. When signed up for their service, these companies would negotiate with the creditors of the borrower and arrive at a reasonably low amount of repayment. Doubtless this reduction of the debts would be subject to a wide array of conditions, but still it is beneficial to the borrower who is unable to meet up with the monthly payments. Reputable debt settlement companies could effectuate a reduction of even as much as 75% of the owed amount.
However, searching for the right debt settlement company could be an uphill task. Important things to know are what the companies would do for their borrowers and what their modus operandi is. Once this is understood, the borrower will be in a better position to choose the right debt settlement company.
The following are the ways in which debt settlement companies work:-
1. Generally debt settlement companies will charge some fees which could include start up fees and maintenance fees. The genuine companies are those which will take this money from you on a monthly basis and put them in an escrow account.
2. When this money is built up enough, they would initiate the talks for the settlement of the debt. The negotiation would be done by the debt settlement company on your behalf.
3. Once the negotiation is successful, the debt is paid off. Then the money is collected again for any second loan you may have. The process is continued till all the debts owned are paid off.
For these services, the debt settlement companies would charge their fees. Fees of the debt settlement companies would be a percentage of the amount that they manage to save for you. Therefore, this fee is also called as a settlement fee.
Though it seems simple on paper, debt settlement may not always be that simple. This is because when the money is building up in the escrow, you are also building up on the interests and late payment fees. This could in fact balloon to a huge amount when the time comes to negotiate for settlement.
Genuine debt settlement companies would charge their settlement fees on the original balance and not on the current balance. If any company is charging on the current balance, then it could be an indicator that the company is not having noble intentions.
There are credit counselors who could help you in locating some genuine debt settlement companies. These counselors could also give you valuable assistance on other methods of achieving freedom from debts, such as debt refinancing and debt consolidation. This might in fact help you maintain some of your good credit ratings.
It is important to keep in mind that debt settlement companies are meant for those people who are earnest in paying off their debts, and not for those who wish to save money unjustifiably. Debt settlements would look at your overall financial picture before beginning the process of settlement. If a company does this at the onset, then you can rest assured that you have landed with a genuine debt settlement company.
Thursday, June 7, 2007
Dept Settlment help
If your credit card debt is keeping you up at night, there’s a strong possibility that you’re in the process of determining which path would best suit you so that you can be free of debt and start living again. As a matter of fact, you’ve probably scoured the Internet for hours at a time, yet still find yourself confused and not sure if Consumer Credit Counseling is your best option or perhaps Debt Settlement may be your path to financial freedom.
Your own personal financial situation is really the most important factor that can best determine the most fitting choice when it comes to your way out of debt. You see, Consumer Credit Counseling is a good choice for individuals whose debt isn’t extremely high, and who can commit to a long term repayment arrangement with their creditors. If you should choose to hire a Consumer Credit Counseling agency, they will contact your creditors to negotiate reduced interest rates on your accounts, and set you up with a reasonable monthly payment, which they will distribute to your various creditors. Usually, the entire process will leave you with no further money owed by the end of approximately five years or so. You’ll still be required to pay some interest, and the full balance on each of your accounts, but as was stated previously, the end result will leave you with no further debt.
Does Consumer Credit Counseling work for everybody? Well, certainly not. As a matter of fact, I recently talked with an individual who had been enrolled in Consumer Credit Counseling for almost two years, paying out nearly $1,700 per month. What’s worse is that the program wasn’t scheduled to end and bring this person out of debt for at least another three years. This is understandable because the Consumer Credit Counseling Agency was only able to negotiate the interest rates on this person’s accounts down to 16%. Obviously, in this case, Debt Settlement may be the right way to go. You see, based on the amount of money still owed, this individual will be free from debt in less than 18 months if they choose to attempt negotiating with their creditors for a reduced payoff amount (debt settlement). So, as you can see, if Consumer Credit Counseling is not a good option for you, Debt Settlement may be if you can afford to accumulate sufficient funds on a monthly basis, or if you have funds available through a 401K or home equity line of credit. Some people have even borrowed from close family members to successfully reduce their debt through Debt Settlement. If one or more of these opportunities is available to you, perhaps you may want to consider Debt Settlement as a viable path to become debt-free.
In any case, what’s most important is that you eliminate high interest credit card debt quickly, because it could take you in excess of 30 years to pay off your debt if you continue making the minimum monthly payments.
Your own personal financial situation is really the most important factor that can best determine the most fitting choice when it comes to your way out of debt. You see, Consumer Credit Counseling is a good choice for individuals whose debt isn’t extremely high, and who can commit to a long term repayment arrangement with their creditors. If you should choose to hire a Consumer Credit Counseling agency, they will contact your creditors to negotiate reduced interest rates on your accounts, and set you up with a reasonable monthly payment, which they will distribute to your various creditors. Usually, the entire process will leave you with no further money owed by the end of approximately five years or so. You’ll still be required to pay some interest, and the full balance on each of your accounts, but as was stated previously, the end result will leave you with no further debt.
Does Consumer Credit Counseling work for everybody? Well, certainly not. As a matter of fact, I recently talked with an individual who had been enrolled in Consumer Credit Counseling for almost two years, paying out nearly $1,700 per month. What’s worse is that the program wasn’t scheduled to end and bring this person out of debt for at least another three years. This is understandable because the Consumer Credit Counseling Agency was only able to negotiate the interest rates on this person’s accounts down to 16%. Obviously, in this case, Debt Settlement may be the right way to go. You see, based on the amount of money still owed, this individual will be free from debt in less than 18 months if they choose to attempt negotiating with their creditors for a reduced payoff amount (debt settlement). So, as you can see, if Consumer Credit Counseling is not a good option for you, Debt Settlement may be if you can afford to accumulate sufficient funds on a monthly basis, or if you have funds available through a 401K or home equity line of credit. Some people have even borrowed from close family members to successfully reduce their debt through Debt Settlement. If one or more of these opportunities is available to you, perhaps you may want to consider Debt Settlement as a viable path to become debt-free.
In any case, what’s most important is that you eliminate high interest credit card debt quickly, because it could take you in excess of 30 years to pay off your debt if you continue making the minimum monthly payments.
Subscribe to:
Posts (Atom)