Use,Caution,When,Selecting,Deb finance, share, loan Use Caution When Selecting a Debt Settlement Company
If your financial problems have reached the point where you do not see a way out and you feel as though you are drowning in debt, your best way out is through declaring bankruptcy. Filing may well allow you to get your finances back on track Thankfully, there are now several web sites that are there to help people like you with bad credit to find the fast personal loans that you need. When you have bad credit, the first thing that you should be looking for is a loan company that
When searching for a solution to an excessive debt burden, Debt Settlement seems to be one of the more popular options. There is no best option for debt relief. The best option is up to the individual looking to become debt free. Debt Settlement however, is the most heavily advertised. Many Debt Settlement companies are actually extensions of the banks and credit card companies themselves. They have deep pockets to advertise, and would rather get a smaller amount from you, before they get nothing at all.There are some reputable Debt Settlement companies out there, and some that should be avoided. Their responsibilities are to contact their client's creditors, and attempt to negotiate a payoff or settlement on a specific account. A settlement can get somebody out of debt very quickly, but only if the agreed to amount can actually be paid quickly.There are a few issues to be aware of. A Debt Settlement specialist will tell you that you have the right to settle your debts for less than you owe. Some of these companies even put that claim into their advertisements. This is actually true. You do have the "right" to settle. Unfortunately, what they don't tell you is that the creditor has no obligation to actually agree to a settlement.Nobody can force a creditor to agree to a smaller payoff amount. If a reduced payoff amount can be agreed to, then the terms of payment must also be agreed to. The creditor may only agree to a reduced amount if that amount is paid in full immediately. They may also agree to a payoff over time. However, the total settled amount will probably be higher. Failure to submit timely payments on a payment plan may also void the agreement, and the creditor will again begin to demand full payment. Check the fine print for that one.A person who has hit financial troubles, but has remained current with their credit card payments, may feel like they are being pro-active by contacting the bank to explain their financial situation in hopes to work out a payment plan or a reduced settlement amount. Unfortunately, this often just raises a red flag on the account, giving the bank another excuse to raise the interest rate on the account, and perhaps increase the minimum monthly principal due as well. How's that for customer service?Most credit card companies will not even discuss a settlement if the cardholder is current on their payments. For this reason, a settlement specialist might instruct you to stop making your payments to the credit card company. Once the payments are in arrears, the bank may then be open to negotiating a settlement.Be aware though, that when payments are withheld from the credit card company, negative entries will be reported to the credit bureaus, and the harassing collection phone calls will begin. You would also have the responsibility to start saving money into a cash reserve account. This account may need to accumulate several thousands of dollars before a settlement company will actually begin to contact your creditors. In the meantime, you may need to deal with collection calls.The Debt Settlement Company will also want their fee. They don't work for free. Their fee can be 5 to 20% of the negotiated debt. So how much is really being saved? Many companies want this fee up front. So this fee may be taken from your cash reserve account prior to the build up of funds to be used to settle the account. You could spend hundreds or even thousands of dollars before accumulating any money that would actually be used to negotiate a payoff. So be sure to have their plan in writing of exactly what the settlement company will do, and when they will do it.In reality, there is nothing a settlement company can do for you that you cannot do for yourself. In addition, negotiating a settlement yourself will save the cost of the fee paid to the settlement company. This is money that can be used towards the settled payoff amount, instead of into the pockets of the settlement company.Think about it. Educate yourself. Learn something. It's your money. Article Tags: Debt Settlement Company, Debt Settlement, Settlement Company, Credit Card, Payoff Amount
Use,Caution,When,Selecting,Deb