Choosing the Right Debt Settlement Company
April 26, 2009 by Information About Bankruptcy
Filed under Debt Settlement
Choosing the Right Debt Settlement Company
A Google search for “Debt Help” will generate page after page of financial service companies offering different solutions to help you get out of debt. The various “Debt Help” options are generally Debt Settlement, Credit Counseling, Debt Consolidation, and Bankruptcy. In this article I will focus on Debt Settlement and what you can look out for in the consultation process to help you make your decision with confidence. For more information on Debt Settlement and how it works, please visit www.selectdebtrelief.com
Most Debt Settlement (also known as Debt Reduction) companies follow a similar process in qualifying and enrolling their clients into the program. I will break this down into 5 steps:
1. Initial Contact: Many customers will find a list of “Debt Help” companies by typing phrases into search engines such as Credit Card Debt, Get out of Debt, or Debt Relief. The initial contact will be initiated by filling out a form or calling the company directly. This first call will give you the most clues on what kind of business you are dealing with. The most important thing to remember is that Debt Settlement does not work for everybody. If a Debt Consultant makes the program sound like everyone gets accepted, you do not want to go with that organization. The only way a company can successfully reduce your debt is if you are in a financial hardship. Basically, if you don’t need the help, the program will not work because the creditors will have no reason to lower your debt amounts. If you’re current on the bills you still might qualify for debt reduction but only if you are struggling to make the minimum payments. If a Debt Consultant neglects to ask about your state of affairs and pushes you to send in your credit card statements, hang up and call a firm that cares about your specific predicament. An ethical Debt Consultant representing a reputable firm will discuss all the aspects of Debt Settlement, both positive and negative. Remember If it sounds too good to be true, it is. If the initial phone conversation is going well and you have a general understanding of how Debt Settlement works, then it is time to have the company review your credit card/loan statements or a credit report.
2. Submission of Credit Report or Statements: If a company approves you without reviewing your statements, this is a bad sign. Reputable Debt Reduction services will want to review your statements or a credit report to do a comparative analysis. Having the company review your information is part of the approval process and in no way should commit you to anything. This part of the process is crucial because the specific creditors that you are indebted to historically settle at different amounts. The amount by which a creditor will reduce your debt will vary depending on the debt settlement company, financial hardship, creditor collection practices, and credit card delinquency. The job of the Debt Reduction Company is to take everything into account and give you the most accurate quote possible. If you speak with a Debt Relief company and this step is missing, I would not recommend taking the process any further.
3. Underwriting: The underwriting (also known as approval, qualification) process is designed to ensure that only qualified applicants are being approved for the program. This is an extremely important step to a reputable Debt Settlement firm because it’s a system intended to help ensure that approved applicants make the transition to satisfied clients with the highest rate of success possible. If a company is letting everyone in the door, chances are many of these clients are getting settlements rejected by their creditors because they are not qualified to have a Debt Reduction.
4. Approval: If you are approved for a Debt Settlement program the consultant will be able to tell you how much your monthly payment is and for roughly how long it will take for you to be debt free. In the field of Debt Settlement the successful programs are usually not more that 3-4 years in length. Every creditor has a window of opportunity when they are willing to accept settlements and the vast majority will be approved within 3 and 42 months. If a company says that they can reduce your debt by fifty percent and offers you a 5 year program, be cautious. In Debt Settlement the creditors will be paid off one at a time and the possibility of legal action from the creditor increases as the debt becomes more delinquent.
5. Agreement: If the approval is within range and you would like to move forward the next step is to look at the agreement. The agreement should clearly state your monthly payment and fee schedule. Make sure to read the entire document and write down any extra questions that come up. You should be able to cancel the Debt Settlement mid-program if needed, without being responsible for future monthly payments. Of course nobody enters a Debt Settlement Program intending to cancel 10 months down the road but if something unexpected happens to your income, you need to be able to sever the relationship. If you read the agreement and it seems the opposite of what your Debt Consultant explained to you, it is not a wise idea to sign up with that company.
Now that you have found the best company for your needs focus on your new monthly payment. If you ever can afford to pay above your minimum monthly, I highly recommend doing so. Remember, the goal is to pay off this debt as fast as possible. Stay in communication with the customer service department and refer communication from your creditors to the Debt Relief Company. Before you know it the debt will be showing $0 balances and you will be on the road to financial freedom. If you ever get discouraged in the program and the anticipated 2-3 years to pay off the debt, just remember the alternative of making minimum monthly payments or the financial position you were in before the program started.
Thanks to Adam Jasa for contributing this article to our Bankruptcy blog:
A Google search for “Debt Help” will generate page after page of financial service companies offering different solutions to help you get out of debt. The various “Debt Help” options are generally Debt Settlement, Credit Counseling, Debt Consolidation, and Bankruptcy. In this article I will focus on Debt Settlement and what you can look out for in the consultation process to help you make your decision with confidence. For more information on Debt Settlement and how it works, please visit www.selectdebtrelief.com
Most Debt Settlement (also known as Debt Reduction) companies follow a similar process in qualifying and enrolling their clients into the program. I will break this down into 5 steps:
1. Initial Contact: Many customers will find a list of “Debt Help” companies by typing phrases into search engines such as Credit Card Debt, Get out of Debt, or Debt Relief. The initial contact will be initiated by filling out a form or calling the company directly. This first call will give you the most clues on what kind of business you are dealing with. The most important thing to remember is that Debt Settlement does not work for everybody. If a Debt Consultant makes the program sound like everyone gets accepted, you do not want to go with that organization. The only way a company can successfully reduce your debt is if you are in a financial hardship. Basically, if you don’t need the help, the program will not work because the creditors will have no reason to lower your debt amounts. If you’re current on the bills you still might qualify for debt reduction but only if you are struggling to make the minimum payments. If a Debt Consultant neglects to ask about your state of affairs and pushes you to send in your credit card statements, hang up and call a firm that cares about your specific predicament. An ethical Debt Consultant representing a reputable firm will discuss all the aspects of Debt Settlement, both positive and negative. Remember If it sounds too good to be true, it is. If the initial phone conversation is going well and you have a general understanding of how Debt Settlement works, then it is time to have the company review your credit card/loan statements or a credit report.
2. Submission of Credit Report or Statements: If a company approves you without reviewing your statements, this is a bad sign. Reputable Debt Reduction services will want to review your statements or a credit report to do a comparative analysis. Having the company review your information is part of the approval process and in no way should commit you to anything. This part of the process is crucial because the specific creditors that you are indebted to historically settle at different amounts. The amount by which a creditor will reduce your debt will vary depending on the debt settlement company, financial hardship, creditor collection practices, and credit card delinquency. The job of the Debt Reduction Company is to take everything into account and give you the most accurate quote possible. If you speak with a Debt Relief company and this step is missing, I would not recommend taking the process any further.
3. Underwriting: The underwriting (also known as approval, qualification) process is designed to ensure that only qualified applicants are being approved for the program. This is an extremely important step to a reputable Debt Settlement firm because it’s a system intended to help ensure that approved applicants make the transition to satisfied clients with the highest rate of success possible. If a company is letting everyone in the door, chances are many of these clients are getting settlements rejected by their creditors because they are not qualified to have a Debt Reduction.
4. Approval: If you are approved for a Debt Settlement program the consultant will be able to tell you how much your monthly payment is and for roughly how long it will take for you to be debt free. In the field of Debt Settlement the successful programs are usually not more that 3-4 years in length. Every creditor has a window of opportunity when they are willing to accept settlements and the vast majority will be approved within 3 and 42 months. If a company says that they can reduce your debt by fifty percent and offers you a 5 year program, be cautious. In Debt Settlement the creditors will be paid off one at a time and the possibility of legal action from the creditor increases as the debt becomes more delinquent.
5. Agreement: If the approval is within range and you would like to move forward the next step is to look at the agreement. The agreement should clearly state your monthly payment and fee schedule. Make sure to read the entire document and write down any extra questions that come up. You should be able to cancel the Debt Settlement mid-program if needed, without being responsible for future monthly payments. Of course nobody enters a Debt Settlement Program intending to cancel 10 months down the road but if something unexpected happens to your income, you need to be able to sever the relationship. If you read the agreement and it seems the opposite of what your Debt Consultant explained to you, it is not a wise idea to sign up with that company.
Now that you have found the best company for your needs focus on your new monthly payment. If you ever can afford to pay above your minimum monthly, I highly recommend doing so. Remember, the goal is to pay off this debt as fast as possible. Stay in communication with the customer service department and refer communication from your creditors to the Debt Relief Company. Before you know it the debt will be showing $0 balances and you will be on the road to financial freedom. If you ever get discouraged in the program and the anticipated 2-3 years to pay off the debt, just remember the alternative of making minimum monthly payments or the financial position you were in before the program started.
Thanks to Adam Jasa for contributing this article to our Bankruptcy blog:
Adam Jasa is the Founder of Select Debt Relief www.selectdebtrelief.com. He has years of experience working in the finance and real estate fields, most recently with the Freedom Financial Network in their Financial Consulting Department. He is an expert in the different options available to consumers with unmanageable debt burdens. His company, Select Debt Relief is a member of Debt Resolution Partners which currently manages over $900 million of consumer debt.
Debt Settlement: Your Bankruptcy Alternative?
March 4, 2009 by Information About Bankruptcy
Filed under Debt Settlement
There are several different paths you can travel to achieve effective credit card debt reduction and pursue living a debt free life. The method which will be covered here is called debt settlement, and there are numerous debt settlement services to choose from if you determine this is the “debt recovery path” you are going to take. Credit card debt settlement is a credit card debt reduction solution where a negotiation is done with each individual creditor so that a lesser amount is paid, but considered a payment in full on the total outstanding debt. This debt settlement method is oftentimes called credit card debt negotiation or credit card settlement.
To assess if debt settlement is a credit card debt reduction method may be right for you, it is important to first to know the path you are on right now. Begin by asking yourself some very important questions, and be brutally honest with yourself! Have your bills gone to collection agencies? If your accounts have not been turned over to collection agencies, how many months past due are you? Have you started using “balance transfers” as a way of moving your unsecured debt from one creditor to another? Has the concept of filing bankruptcy been in the back of your mind? Are you barely able to pay your minimum payments? Or have you been able to avoid most of these situations, but are afraid you won’t be able to do so for much longer? Are you under constant financial pressure from your credit card debt problems?
Most people would rather pay considerably less money than they owe, right? Not so fast, creditors will only agree to this type of debt settlement program with people who appear to be on the verge of filing bankruptcy but prefer a bankruptcy alternative. The reason a creditor will agree to allow you to pay thousands less than you owe, is because once you are involved in a bankruptcy you will no longer be obligated to pay them a single cent. They prefer to get “something” rather than “nothing”. Obviously creditors will take what they can get while they can get it. However, do know that you are not required to file bankruptcy to be considered for a debt settlement offer from an unsecured creditor. All you need is a reputable and experienced debt settlement service that is both effective and diligent about convincing your creditors to take reduced offers on your credit card debt. Debt settlement services will have those “bankruptcy alternative” discussions directly with your contracted creditors. They will make your creditors aware that you prefer to avoid bankruptcy but have little disposable cash flow to work with, both now and in the foreseeable long term future.
Your creditors may consider you a prime candidate for credit card debt settlement if they review your credit payment history and find that you have frequently been late on your monthly payments, failed to make your payments for several months at a time, or even have unsecured accounts already turned over to various collection agencies. Remember that unsecured creditors do not hold assets that could cover your credit card debt balances like a home or a vehicle. If this is your situation you should contact a debt settlement service with experienced negotiators that will work on your behalf to help reduce your credit card debt through debt negotiation. You will find that debt settlement programs are designed around your current financial dilemma, and attempt to give you significant relief in the monthly commitment required for your credit card debts. Debt settlement programs typically take 2-3 years to complete. You will find that debt settlement services offer a complimentary consultation. This consultation process is used to assess your financial situation and provide you with a workable credit card debt reduction plan that may become your bankruptcy alternative!
Thanks to Mansi Gupta for contributing this article to our Bankruptcy blog:
To assess if debt settlement is a credit card debt reduction method may be right for you, it is important to first to know the path you are on right now. Begin by asking yourself some very important questions, and be brutally honest with yourself! Have your bills gone to collection agencies? If your accounts have not been turned over to collection agencies, how many months past due are you? Have you started using “balance transfers” as a way of moving your unsecured debt from one creditor to another? Has the concept of filing bankruptcy been in the back of your mind? Are you barely able to pay your minimum payments? Or have you been able to avoid most of these situations, but are afraid you won’t be able to do so for much longer? Are you under constant financial pressure from your credit card debt problems?
Most people would rather pay considerably less money than they owe, right? Not so fast, creditors will only agree to this type of debt settlement program with people who appear to be on the verge of filing bankruptcy but prefer a bankruptcy alternative. The reason a creditor will agree to allow you to pay thousands less than you owe, is because once you are involved in a bankruptcy you will no longer be obligated to pay them a single cent. They prefer to get “something” rather than “nothing”. Obviously creditors will take what they can get while they can get it. However, do know that you are not required to file bankruptcy to be considered for a debt settlement offer from an unsecured creditor. All you need is a reputable and experienced debt settlement service that is both effective and diligent about convincing your creditors to take reduced offers on your credit card debt. Debt settlement services will have those “bankruptcy alternative” discussions directly with your contracted creditors. They will make your creditors aware that you prefer to avoid bankruptcy but have little disposable cash flow to work with, both now and in the foreseeable long term future.
Your creditors may consider you a prime candidate for credit card debt settlement if they review your credit payment history and find that you have frequently been late on your monthly payments, failed to make your payments for several months at a time, or even have unsecured accounts already turned over to various collection agencies. Remember that unsecured creditors do not hold assets that could cover your credit card debt balances like a home or a vehicle. If this is your situation you should contact a debt settlement service with experienced negotiators that will work on your behalf to help reduce your credit card debt through debt negotiation. You will find that debt settlement programs are designed around your current financial dilemma, and attempt to give you significant relief in the monthly commitment required for your credit card debts. Debt settlement programs typically take 2-3 years to complete. You will find that debt settlement services offer a complimentary consultation. This consultation process is used to assess your financial situation and provide you with a workable credit card debt reduction plan that may become your bankruptcy alternative!
Thanks to Mansi Gupta for contributing this article to our Bankruptcy blog:
Liv Worthington has worked in debt management for many years. She takes pride in helping all of her clients find credit card debt reduction solutions like debt settlement when they need help with serious credit card debt problems.
