Introduction to Debt Settlement
If you find yourself loaded down with outstanding dues and debts and cannot figure out how to repay all that you owe, it may be time to consider debt settlement. Before you take the plunge, however, you should know that the industry itself is not very well regulated and the entire process can be very risky. If you do need to hire a company, you will need to do enough research and fact-checking to ensure that you are dealing with a legitimate and trust-worthy corporation. Despite these potential setbacks, you may need to seriously consider debt settlement. Debt Settlement can be a welcomed relief for individuals who do not want to declare bankruptcy.
Factors of Debt Settlement
There are several factors when considering whether or not to engage with a debt settlement company. The higher your debt is, the more effective they can often be.
Legal involvement
Sometimes, creditors desire to work with a debt settlement company in your favor. In such cases, the debt settlement company is accustomed to dealing quickly with creditors and their attorneys to reduce how much you owe them and establish a payment schedule.
Impact to credit score
Unfortunately, being in debt and unable to pay off outstanding expenses generally means that your credit score will be damaged. A debt settlement company can help you negotiate your remaining payments, which could save your score from getting worse.
Regulation
This industry is regulated both at the State and Federal level. You can rest assured that if you choose a reputable firm, you and the creditors will be following processes established to protect you and your money.
Patience
Debt settlement can be a very slow process, and you will need to be patient as your outstanding debts are being negotiated.
Fee structure
When you hire a debt settlement company, you will have a chance to lean about their fee collection. Some charge up front, some charge monthly, and some charge a percentage of the final negotiated debt reduction.
Preparing for Debt Settlement
If you believe that debt settlement is right for you, start by narrowing down legitimate companies. This includes companies that do not make false promises, such as getting creditors to stop calling you. Be sure to speak with a bankruptcy attorney who has experience with debt settlement to see what your options are. You should also seek out attorneys who have extensive knowledge in credit industry compliance. If you are asking yourself the question, does debt settlement make sense then make sure you are prepared.
