How It Works
General Information
Debt doesn't have to be a Burden
In debt settlement, your debts may be negotiated to an average of between 35% and 60% of your total debt. Creditors will initially put up resistance before cooperating with a debt settlement offer. This is why doing it yourself can be extremely frustrating and fruitless. Skilled and experienced debt settlement negotiators often have rapport with collection agencies and tend to be more successful in obtaining settlements.
How It Works
A settlement program isn’t for everyone and it’s important to know if it’s the right program for you. You should only consider a Debt Settlement if you can’t pay your regular minimum monthly payments and/or you can’t afford a consolidation program. When you enroll into a Debt Settllement program you are given a monthly payment. This payment you make monthly does NOT get sent to your creditors or collectors on a monthly basis. Instead, this money is put away usually in a Trust Account. The money sits there every month accumulating until you have enough to settle with one of your creditors.
Let’s use an example to make this easier. Let’s say you owe a collector $10,000. An average settlement on this amount of debt would be $4,000. Now let’s say your monthly payment is $200. When you pay your $200 monthly, it gets put into an escrow/trust account until you reach $4,000. Once you have that amount, attorneys then negotiate with your creditors to accept that $4,000 instead of the $10,000. Once that creditors is settled they move on to the next. This is a step by step process and it can have you out of debt within 18-36 Months.
The TRUTH
- Knowing the Truth
Knowing the truth about a debt settlement program is crucial. Please keep the following in mind when shopping around for a Debt Settlement company. Look for a company that doesn’t offer ONLY settlements. That would mean they have nothing else to offer you and will push you into a settlement program even if it’s not right for you. Below we will inform you on the facts of a settlement program.
This will not be “sugar coated”. It’s the truth and there’s no way around it.
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When you join a settlement program your bills do not get paid monthly. This will have a negative affect on your credit. There is no way around this. No matter what any other company says a settlement program WILL impact your credit negatively. This will not change when the program is done. When you’re done with a settlement program you’ll need to rebuild your credit again. It will not automatically be fixed.
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IMPORTANT! Because your bills do not get paid monthly, the creditors still have the right to come after you for the money. Just because you’re enrolled into a settlement program doesn’t mean your exempt from the creditors ability to sue you! Do not let any settlement company tell you otherwise! We’ve heard a lot of companies tell consumers that because they’re in a settlement program that they can’t get sued. THIS IS NOT TRUE! A creditor or collector can take you to court for the monies you owe (whether or not you’re enrolled in a settlement program).
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If a creditor takes you to court and gets a judgment on your account. They ARE able in most states to do one or more of the following: Garnish your wages. Place a lien on your home. Freeze your bank account. Garnish your bank account. In some cases even force the sale of property to pay for the debt.
- A settlement program is great for those who can’t afford to pay their bills or to do a consolidation program. If this is the case, then at this point you’ll want to do a settlement program to avoid bankruptcy. Keep in mind if you’re not paying your bills monthly, you still run the same risks stated above. All though those risks do not happen to everyone, they are possible. Don’t wait. If you know you need help, call someone and ask for it. Find yourself a reputable company with the Better Business Bureau and start doing something today to eliminate your debt! The longer you wait, the worst it gets.
