Should You Work with a Debt Settlement Company?

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Having a multitude of debt (whether credit card debt or otherwise) can certainly push anyone to the fringes. For most of us, when we come to that point where we feel like we are trapped, it might seem like the only real option is for us to sulk in a never-ending and vicious cycle of credit card minimum payments. However, that is just not the case, there are always options available to you, whether you know it or not. If you have the time and are willing to put in the work you can always try to reach out to your creditors and banks and try to negotiate down your debt on your own. If that just isn’t feasible due to your schedule, one of the most viable options for debt relief is a debt settlement program. Before choosing to enroll the services of a debt relief company or any financial services for that matter you should always weigh the pros and cons of doing so. You should always consider the multitude of debt relief options available in the industry and go with the one best suited to your needs and goals.

For instance, if you are currently carrying credit card balances in excess of $30,000 you may want to consider debt relief programs as a viable option. The reason being is simple, although your unsecured debt amount may seem insurmountable to you and feel like it’s inescapable, it really isn’t. Also, with an amount closer to $30,000 it would make sense to forego options like bankruptcy that will ruin your finances for years to come and move forward with an option that provides almost as much payment relief but with fewer negatives to your credit and other associated ramifications.

The main thing to remember is to not panic and understand that whatever stresses you face in your current situation are on the end of the world! Health and family are always more important that whatever short term mess you may currently be stuck in. Whatever your financial woes, just remember that this too shall pass and that there is always a way to get you out of your current situation. With this option, when most people enlist the services of the debt settlement company, the debt relief company will act as an arbitrator on their behalf to call their creditors and offer a smaller amount than what they currently owe (for e.g. 45% of the debt amount owed). They will typically use hardball negotiating tactics to tell your creditors that if they don’t take the deal, you will probably have to file for bankruptcy, leaving them with no repayment whatsoever. On the other hand, with bankruptcy, they won’t even see a dime of the amount they are owed. In the long run, they will have to work with the debt relief company as it simply doesn’t make any sense not to. Once an offer is accepted, you will feel immediately alleviated from your stress and financial burdens and you can devote more time to things that matter in life. If all goes according to plan, you should be able to get out of the debt paying back approximately 70% of the initial amount owed.

Another thing to keep in mind when working with a debt relief company is the monthly payment relief you would receive from enrolling in a program. If your minimum payments on the $30,000 debt amount are somewhere between $800-$1,000 per month, you can except to save anywhere between $300-$500 every single month. With that extra cash-flow on your balance sheet you will be able to devote more time and money to the important things in life.

However, not every debt relief option will be a frictionless process and sometimes there are one offs where everything does not go as smoothly as possible. Nothing in life is guaranteed but if you do find a reputable company to assist you and feel comfortable working with them you should carefully consider the options offered. Why? There may not be an actual guarantee that your creditors will agree to a discounted payoff—although the chances for success are typically high—since most companies use past performance to make estimates on future performance of program participants. Moreover, there are some associated negatives that come along with enrolling in a debt settlement program. One challenge is that your credit worthiness would see a hit in the short term (although if you are over encumbered by credit card debt you may not have great credit to begin with). It is definitely worth weighing the risks and downsides of debt settlement, but for many, credit may not be the most important financial factor until they resolve their debt issues (as there is an intrinsic correlation between debt owed and credit worthiness). These are some of the associated risks that you have to prepare yourself for when opting to enroll with a Debt settlement company. Despite that, in many cases, debt relief options may be the best way for you to get yourself out of a financial bind and start fresh—with financial freedom in mind.

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