Affected by Debt – Then Debt Solution in Colchester-Center, Connecticut is for You
Debt is one thing that most people tend to have, and once you have it, then it can be hard to pay off, especially if you have thousands of dollars of credit card debt. Debt settlement is a different type of approach than what most people think about when it comes to becoming debt free.
Many people are turning towards debt settlement right now, and some companies are starting to turn them away. However, most debt settlement programs will work with you if you have between $10,000 to $100,000 or more in financial debt. You could have medical bills, credit card debt, student loan debt, unpaid utility bills, and rent.
Advantages of Using Debt Settlement
Why should you think about debt settlement? One reason is that it is going to keep you from having to file for bankruptcy. No one wants to deal with all the paperwork and the problems that come with bankruptcy. Most people want to avoid it. Bankruptcy will stay on your credit report for ten years! That means that any time you want to get a loan, finance a new car, or even fill out some loan applications, it will show up. If you lie about it, you have committed fraud, which means you can lose your job and end up in jail.
Debt settlement is there so that you do not have to file for bankruptcy. Most people use debt settlement as a last resort before thinking about bankruptcy, and that is what it is there for. Bankruptcy is enough for anyone to want to work with a debt settlement company.
If someone looks at your credit history and finds out that you had some financial debt, then know that debt settlement will look much better on your credit history than bankruptcy. The good news is that it only stays on your credit history for seven years. Plus, when you finish the debt settlement program, then it disappears from your credit history, and no one will know about it.
The whole goal of debt settlement is not for you to cheat your creditors. Debt settlement is for those struggling to pay their debts without any other way. It is the last resort option for those who cannot get out of debt before filing for bankruptcy. The truth is that you may end up paying more than what you owe if you had gone the traditional way of paying your debts off.
There is a big difference between filing for bankruptcy and debt settlement programs. Creditors know they will not get much from you if they get anything at all when you file for bankruptcy. However, they are more willing to work with a debt settlement program because they will receive something.
This is a great way to pay back your debts in less time. You can have your debts paid off in under four years, and if you are lucky, you could have them paid off in a year. Paying back your debt is a much longer process without the help of a debt settlement program, plus it is quicker than using credit counseling, debt consolidation, and filing for bankruptcy.
You can protect your credit score when you go with debt settlement. Debt settlement is not a matter of public record. However, bankruptcy is. If someone wants to find out if you have filed for bankruptcy, then all they have to do is look online with a paid service or get the information from a federal government court. Even though debt settlement can be seen on your credit reports, it will not lower your credit score.
You may still be able to use your credit cards. There are some cases where your debt settlement agreement will keep you from using your credit card, but some will let you use them in cases of emergency. If you owe a lot in credit card debt, you may not get approved for any new credit cards or be able to use your credit cards. Using your credit cards would be pointless if you were in a debt settlement program.
If you use a debt settlement program, you will not have multiple monthly payments with different interest rates from different creditors. It will be a single monthly payment, meaning you will enjoy having decreased monthly payments and lowered interest rates. Debt settlement programs will provide you with affordable payments and interest rates. That also means that you will have more money each month.
Debt Settlement Program Disadvantages
There are some negative consequences to debt settlement programs. You may end up owing taxes on your forgiven debts, not all settlement offers will be accepted, and your debt settlement can be seen on your credit. It can also be a hassle to go through with a debt settlement program when you compare it to paying back your debts on your own. It is still a great option if you are just a step away from having to file for bankruptcy. It is best to think about the advantages and disadvantages before doing anything.
You also have the possibility of losing your property and home. If you use your assets like your home or car as a type of collateral, then you could lose the property if you cannot make your payments. Usually, these programs will only work with you if you have collateral. The agency will need to be assured that you will pay them; if not, they have a way to make that money back. You are not seen to be dependable when you look into debt settlement.
There may also be hidden costs. Even though you will have smaller monthly payments and interest rates, debt settlement loans can mean you will owe more money. You may get a longer loan repayment term, lower payments, and interest rates. If you have a longer period of debt, then you may end up paying more over a longer time.
There are also tax issues that you need to keep in mind. Based on your economic circumstances, anything you do not need to pay back because any forgiven debt may be considered taxable income by the IRS. You will be taxed on it if your creditors report it.
Are You Able to Afford Debt Settlement?
Debt settlement can cost you at least 10 to 20% of your starting balance and an application fee. This can be paid off over a couple of years, and if you have $30,000 in debt, you can end up paying $3,000. It could feel like a lot, but if this cuts your debt in half, it is worth it.
How Debt Settlement Programs Work
Debt settlement means that the service will get in touch with your collectors and work out deals to work out your debt. Most collectors will agree on a settlement of around 50% of your owed balance. However, it could range from 40% to 60%. Without a debt settlement company, if you file bankruptcy, they may not get anything at all, so they are willing to take what they can. If someone is working with a debt settlement company, they are nearly filing bankruptcy. This makes the banks and creditors anxious, and if you are dealing with a hardship, you may not have the option to pay your monthly bills.
No one should think about debt settlement without thinking it over. You will deal with some hardships regarding your credit, and you cannot get a new loan or credit lines until you are done with the program.
If your only choice is bankruptcy, it may be best to look into debt settlement, but it should not be your first option. Debt settlement is extreme, and it is not a way to get out of paying off your debts.
You must check the status, standard, and cost of the debt settlement program that you go into.
Advantages of Working with a Debt Settlement Program
Debt settlement programs will damage your credit ratings, but they can help pay off what you owe over time. Around 25% of people who work with a debt settlement program will have the debt paid off in a year. Most can have their debt paid off in up to 3 years. Taking time to get on top of your debt is essential; even when it is not needed, a good debt settlement agency will constantly contact you. When you need someone on your side, they will be there.
Debt Settlement Program Agencies in Colchester-Center, Connecticut
Do not enter into any debt settlement program without checking with the consumer protection service and Attorney General. They will tell you if there are any complaints about the service. You will want to do this to ensure that you are getting the best debt settlement agency to work with that has little to no complaints about their business practices.
You will want to know what type of services and support they offer, how much it will cost, and how long it will take you to get debt free. Do not go with a program with high advance fees; try to hide what you will pay.
The best option is to look for a debt settlement program with in-person services. You will thrive if they have in-person, phone and internet services.
A company’s non-profit status does not mean that they are legit, free, or even low-cost. It may not be obvious, and the service could try to hide it, but most have outrageous fees.
Always check out the reviews before you pick a program, and list agencies you are researching.
