Debt Settlement 101: How to Get Out of Your Debt Today
If you’re in the middle of a financial crisis with creditors down at your throat and almost nothing in your pocket, know that it isn’t the end of the road yet. Now can be a frustrating time, especially if you’ve got bills to pay and responsibilities to take care of. If you’re looking for debt settlement in AZ, Jenkins Law Firm PLLC can help. Before you get into debt settlement, it helps to know the many complexities that surround it and if it really is the best option for you. Continue reading below to learn more.
What is Debt Settlement?
Debt settlement is defined as the process of paying a one-time lump sum payment to your creditor that is less than your existing debt amount. In debt settlement, the creditor “forgives” the remaining amount and allows you to pay less than what you really owe. The process is a compromise the creditor makes for borrowers who are in a financial crisis. Debt settlement typically works for unsecured loans or loads that do not require security such as student loans, credit cards, and medical bills. Take note, however, that when a debtor seeks for debt settlement, his credit history may be negatively affected so only pursue debt settlement if there is no other way out of your rut.
Doing It Yourself
If you know the ins and outs of debt settlement, then you may find it easier to negotiate with your own creditors. The very first step to employ debt settlement by yourself is to save as much money as you can as you cannot go for a negotiation when you are empty-handed. Be very honest about your financial situation and do not try to mislead your creditor. Your creditors have full access to your credit history, so tread very carefully. If you do not have enough knowledge on the finance industry, have poor negotiation skills and are not very assertive, you may find it to your advantage to seek the help of a debt settlement company.
Asking for Help
Debt settlement companies are expert negotiators to whom you pay a specific amount whenever possible. The fees you pay get deposited in an exclusive account, and once you have paid enough for negotiation with your creditor, the debt settlement company coordinates with the creditor in your behalf. These companies will not charge you a fix fee for this service. Instead, a debt settlement company may charge you a specific percentage of your overall debt, or perhaps a percentage of your discounted debt through debt settlement. Debt settlement companies differ in their charging patterns.
When looking for debt settlement, always make sure to seek guidance and advice and avoid blindly diving into the process. This is a financial compromise that requires various paper works and legal documentations, so it may be better to seek the help of experts who have experience in the field. Have your financial track record in hand and be ready to show this data to your creditors in order to prove your current financial situation!