How Debt Settlement Can Get You Out Of Debt
Saturday, January 30, 2016, 6:00 AM | Leave Comment
Anyone who has ever carried the burden of financial debt knows just how crippling of an experience it can be. When you owe a massive amount of money to creditors that you’re unable to pay off, it’s something your mind turns back to again and again throughout the day.
Financial turmoil comes hand in hand with increased stress, loss of sleep and debilitating anxiety.
Repaying creditors all at once simply isn’t possible for most people, and if this sounds like you, doing some thorough research into ways to lower your debt payments is paramount for you and your financial future in 2016.
According to a recent NerdWallet article, “The average U.S. household with debt carries $15,355 in credit card debt and $129,579 in total debt.
It’s easy to say we should simply pay off our balances and free ourselves of the burdens — financial and emotional — that come with financing many aspects of our lives. But it’s not that simple.”
Part of the recent rise in national credit card debt can be blamed on a strengthening economy. “With seven of the past 10 quarters reflecting year-over-year regression in consumer performance, evidence is mounting to support the notion that credit card users are reverting to pre-downturn bad habits,” says CardHub CEO Odysseas Papadimitriou in a recent report.
If you want to settle your debt, the first step is to find out just exactly how much debt you owe. This can be a scary process for some people, but it’s something that has to happen before you can begin to consolidate the debts you owe and begin to pay them off.
Put together a master list of all of the debt you: credit cards bills, medical bills, missed mortgage payments, student loans and anything else that you owe.
Applying a concise dollar amount to your debt will help you know exactly what you’re dealing with.
Also, it should be noted that the longer you wait to address your debt troubles the more severe your debt will become.
Credit card debt is particularly nasty, because it has the potential to grow at a very fast pace. Ignoring mounting credit card bills is a surefire way to increase your debt quickly.
If you know you need help paying off your debts, it’s wise to seek it sooner than later. The worst thing you can do is to pretend like your debt problems don’t exist. Millions of people struggle with their debt, so there’s nothing to be ashamed of.
If you’re having trouble paying off your debt, an option you might want to consider is debt settlement.
-
What is Debt Settlement?
Debt settlement is a process where a professional service negotiates with creditors on your behalf. Their job is to get your monthly payments as low as possible by talking directly with the companies that own your debt.
Experienced debt settlement companies have an impressive amount of leverage with creditors, and they often employ a “bulk settlement” approach.
This approach where the settlement company will bulk together, at times hundreds of clients’ worth of accounts, and then negotiate with the creditor based on a massive number of clients’ worth of debt at a given time.
Your creditors would prefer to get some amount of money from you rather than getting nothing if you go bankrupt, so they are often willing to negotiate.
According to the debt settlement company CuraDebt, “Debt settlement works by your placing an agreed to amount into a special purpose account on a monthly basis.
If you have a lump sum amount to get started, or have access to a lump sum, it would accelerate the speed of the program.
As money accumulates, CuraDebt finalizes resolutions with the creditors one at a time with the goal of saving you as much money possible on each account.”
Something like complete credit card debt forgiveness isn’t possible, but a team of professionals negotiating to lower your debt is.
Working with a reputable debt settlement company can save you time and money, and it can give you the peace of mind knowing that you’re making progress in repaying your debts.
-
What to look for in a debt settlement company
When looking for a debt settlement company, be sure to go with someone with years of proven experience and a stellar reputation.
Here are some useful information you should know well before enrolling in a debt settlement program:
-
How long has the company been in the industry?
-
What do people say about them?
-
Do they have good ratings?
-
Do they have the necessary accreditations?
-
How much are the charges?
-
Do they have friendly and approachable counselors?
-
Can you easily reach them in case you have questions needed to be answered?
-
-
The bottom line
Whatever you decide to do with your debt, it’s imperative that you do it now, especially when it comes to credit card debt.
The credit card industry makes billions of dollars every year by giving high interest credit cards to desperate people.
They’re betting that you will forget to pay a bill on time, or that you’ll begin rely on your credit card more than your actual cash.
If you use a credit card with a 29% interest rate, you’re setting yourself up for disaster and an unsustainable situation. Don’t sit back and do nothing while your credit card debt balloons.
So, how will you know if debt settlement is right for you? If you’re in a situation where you’re drowning in bills and unsure how to settle credit card debt, then debt settlement is a good way to lower the amount you owe and avoid bankruptcy.
Finding out how much you owe and making a repayment plan with a reputable debt settlement company will help put your mind at ease.
The prospect of paying off all the money you owe creditors may seem daunting, but you’ll feel probably feel a huge sense of relief once you’ve made steps to pay off your debts and move forward with your financial future.
Sources:
http://www.thesimpledollar.com/the-state-of-american-credit-card-debt-in-2015/
http://www.cardhub.com/edu/credit-card-debt-study/#data-and-graphs
http://www.curadebt.com/debt-settlement-program/
http://www.nerdwallet.com/blog/credit-card-data/average-credit-card-debt-household/
http://www.mentalhealthy.co.uk/anxiety/anxiety/anxiety-anxiety-and-debt.html
