Debt Settlement Programs Put a Stop to Interest and Money Woes
As anyone who has ever applied for and received a high interest credit card or loan can attest, debt can accumulate rapidly. When your credit cards are near the spending limit, even being a day late on a payment can cause a chain of over limit and late payment fees that can more than double your debt in a short period. For consumers with multiple debts and perhaps an asset with a fair amount of equity, debt consolidation can be an excellent option. If you have a smaller number of debts, however, or are looking for an immediate solution to your debt problems, debt settlement can be the best option for you.
Debt settlement programs work differently than debt consolidation. With a debt settlement program, you pay a certain amount of money into a trust every month. When the amount saved has reached a certain level, the debt settlement company with negotiate with your creditor to have your balance reduced, using your trust to pay off the debt in full.
When a customer begins the debt settlement process with enough money, debts can also be settled without the waiting period. Typical balance reductions for debt settlement programs are between thirty-five and fifty percent, though debt collectors may be willing to accept lower rates than original creditors. Negotiating and settling your debts is an excellent way to reduce the amount of money owed and stop the accumulation of negative marks on your credit report.
Debt settlement can affect your credit report in many ways. When you settle a debt with a collections bureau, you can request that their portion of the debt be removed from your credit report, but the mark from the original creditor will remain. When you settle directly with your original creditors, it is possible to request that the removal of the debt from your credit report be considered one of the terms of repayment. Creditors are interested in recouping as much of their money as possible, and typically understand that debt settlement is often an alternative to filing for bankruptcy, which can result in creditors receiving no money. While debt is a situation that nobody wants to be in, understand that you are not entirely powerless.
When you are considering debt settlement, know that you may choose to negotiate with creditors directly or to have an experienced company do so for you. If you choose to use a debt settlement company, be certain to look into their results and to find a company that cares more about helping you get out of debt than about collecting large up-front fees. Many debt settlement companies bring years of experience and established relationships with major creditors to the table. This can help you get the rates you need to help you settle your debt affordably. Talk with your debt settlement company and let them know how much you are willing to pay and that you request the item be removed from your credit report. These companies work for you, and will do all they can to help you meet your needs.
In all, debt settlement is a vital tool. Many consumers are facing a single large debt and find themselves looking for immediate options to resolve the problem. Debt consolidation is an excellent tool for people facing a multitude of debts, but if you are looking for a solution that allows you to get rid of your debt once and for all without months of interest and payments, contacting a qualified debt settlement company can prove to be well worth the time and effort involved and can put you back on the road to a good credit score.