Is your debt load preventing you from saving money, helping your loved ones, or accomplishing your financial goals? What if you could put that money towards something meaningful, for example, your retirement, your child’s college tuition, or a much-needed vacation? But how? By opting for and taking advantage of the services offered by the best debt settlement companies. Before you make any assumptions, let us first clear it that debt settlement is not a suitable option for every individual with debt and is not always recommended. That said, it can really help in reducing the financial burden and providing flexibility. Here are 3 important elements of debt settlement:
Inability to Pay
Settlement offers stand only if it’s established that you are not able to pay at all. Your credit score and income statements should reflect you are not in a condition to keep up with your debt obligations. If that’s established, you might be allowed to stop making payments on your debts, and instead, open separate savings account so you can deposit money there. Remember, a creditor/collector might not accept less than what you owe if there’s a reason to believe you can make the payment in full.
Negotiation
When the settlement company believes you have enough money in your savings account for a lump-sum offer, it negotiates with the creditor on your behalf to reduce what you owe, especially on unsecured debt, such as credit cards. Companies also don’t typically settle federal student loans. For that, you might want to consider an income-based repayment plan. You are recommended to discuss your best debt settlement programs with the company.
Acceptance
A debt settlement is considered successful when a creditor/collector agrees to accept less than the amount you actually owe as — full payment. It also means that they stop bothering you for payments. Additionally, you are able to achieve peace of mind knowing that you would not get sued over the debt.
Depending on your settlement, you might be able to:
- Settle debts for less than what you owe
- Avoid bankruptcy
- Get a fixed interest rate of 0% so you no longer have to pay any interest or fees in association with your accounts
- No prepayment penalties
- Significantly lower your monthly payment, making it far easier for you to save money and accomplish your financial goals
Have a lot of debt to pay? Know your best debt settlement programs from experts at America Debt Resolutions and achieve more financial freedom.