What To Know About Debt Settlement In Zephyrhills, Florida
Have issues dealing with debt? Can’t figure out where to get help? Is credit card debt taking a large chunk from your income, causing you to struggle? If you answered “yes” to any of these, keep reading to find out the debt settlement options available in Zephyrhills, Florida.
A debt settlement program is often best for those struggling with high debt to income-ratio. It is more common to find more people impacted by student loan debt, business debt, medical debt, and credit card debt.
Debt settlement businesses are becoming more common, as many consumers are finding their earnings are no longer adequate enough to cover their debt payments. Many find debt settlement to be an amazing opportunity, especially if your debt ranges between $10,000 and $100,000 or more.
Many things can cause financial debt issues, including educational loans, high-interest credit card payments, and mortgages.
What Are The Advantages Of Debt Settlement Programs?
What is the reason people opt for debt settlement programs? Well, it is one of the best options for avoiding bankruptcy. Many individuals do not want to have this action on their credit report for the remainder of their lifetime. Each time your credit report is pulled, you’ll get asked about the individual bankruptcy. It can hinder credit card or loan applications and could even impact job applications throughout your life.
Debt settlement programs give the option to clear debt without a major action influencing the future. If you lie on an application about bankruptcy, you can be charged with fraud, risk jail time, and/or lose a job you received due to providing incorrect information.
It is common for people to consider a debt settlement company as a last resort, which is often the case. However, it makes managing financial hardship much easier, and it’s still a better option than bankruptcy. Avoiding personal bankruptcy should always be a priority when possible.
Debt settlement will appear on a credit report for seven years, unlike bankruptcy,which can appear on credit reports for much longer. Additionally, once removed, it’s no longer visible, and debt settlement has a lower risk of hindering application processes.
Debt Settlement Programs Are Here To Help
Some have the common misconception that debt settlement cheats the creditors out of payments due. However, they are designed to help reduce the financial burden on people with no means of repaying the full amount owed. It is only to be used when other methods are no longer possible before having to file bankruptcy. Take into consideration the amount of interest you have paid to the creditor. There is a good chance you have already paid more back in interest than you spent to begin with.
If you file bankruptcy, creditors get very little, if any, repayment, unlike if debt settlement is used. Because of this, creditors are more likely to accept a debt settlement when the only other situation ends in Chapter 7 bankruptcy, where they know they get nothing.
Pay Off Debt Faster With A Debt Settlement Program
Depending on the debt settlement program, you may have the option to repay the debt within two or four years or less than one year. This is a much faster repayment term than the original debt. Consumer credit counseling, bankruptcy, and debt consolidation have an average 3 to 5-year repayment time.
There are many other reasons debt settlement is beneficial to protecting your future reputation, as it is not a public record. A person could learn about bankruptcy simply by subscribing to an online service providing public records. Another major perk is debt settlement programs do not cause credit scores to go down.
Can Credit Cards Be Used?
Unless the terms of your debt settlement state you cannot use your credit cards, you can still use them. This will allow your open credit lines to remain in place and usable for emergencies. However, if you owe a massive amount of debt, you may not be allowed to continue using credit cards or be approved for new cards right away. The continued use of credit cards can defeat the entire purpose of a debt settlement.
Managing Debt Becomes More Convenient
You no longer have to stress over making multiple payments, different rates, and dealing with several collectors. After you find the right debt settlement program for you, you will only have a single payment to focus on.
Substantially Lower Monthly Bills and Interest
Debt settlement programs not only consolidate your debt into a single payment, they often have much lower interest rates. This will provide you with a lower amount to repay each month, relieving financial stress even further.
Downside To Debt Settlement Programs
Short of repaying debt in full, all debt relief options will have some type of consequence, including debt settlement opportunities. First, creditors are not required to accept a settlement offer, and your credit report is impacted during the time. Additionally, you may owe taxes on canceled debt. Although helpful to many who have no other way to repay debt, repaying debt yourself is always the best option. You should consider the benefits of debt consolidation before deciding if it’s the best option for you.
You will typically be required to put up collateral, such as a residence or vehicle. If you are unable to make your payments, you could lose the property. If you are to the point of considering debt settlement as your best option, creditors see you as high-risk and want to be sure they can collect, even if you’re unable to make your payments.
When debt is canceled, the IRS may consider this amount as “taxable income.” Based on your situation, you could be required to pay the taxes. If the creditors submit the paperwork as “resolved consumer debt,” it will be taxable income.
Consider hidden costs when looking for debt settlement programs. A lower bill or rate will not guarantee you pay less than expected. Lower payments come with longer repayment periods. You could end up paying more over a longer repayment period than if you were to pay a bigger payment with a much shorter repayment period.
Costs Of Using A Debt Settlement Company
In addition to a small application fee, debt settlement companies add 10 to 20% of the actual balance. For example, this could be $1,000 on $10,000 in consumer debt, paid back over a period of 1-2 years. However, that is still a better solution if they can get the consumer debt reduced by 40-60%.
Reasons Debt Settlement Programs Work
Debt settlement companies work by reaching out to all of the creditors you owe, trying to strike a better deal with them to settle each account. The good news is that most collectors are willing to accept much less than owed, averaging between 40% to 60%. The reason collectors accept these types of deals is that it is better for them to collect something. Otherwise, they may not receive any payment.
If a person is going through major hardship, making them unable to pay their monthly bills, banks and creditors understand it is very unlikely they will not receive further payment without accepting a debt settlement deal.
However, debt settlement should not be applied just because you’re financial debt situation is tight at the moment. It impacts your credit report and can take 2-3 years to fully recover your credit standing. This can lower the chance of being approved for credit cards or new loans.
Seeking a debt settlement company in Zephyrhills, Florida, should be a last resort before filing consumer bankruptcy. It is not designed to free you from paying collectors, simply to help when there are no other options to consider.
Are Debt Settlement Programs Worth It?
Although debt settlement does impact your credit, it can begin to quickly improve it by reducing your overall debt and making on-time payments. Many can achieve improved credit within 1-year to 3-years. The process can take time, and many debt settlement companies will reach out to clients regularly.
Things To Consider When Choosing Debt Settlement in Zephyrhills, Florida
When searching for a debt settlement company, you want one that ranks highly in the following three areas: status, price range, and standards.
Before you start applying for a debt relief program, research the company through the Attorney General and local consumer protection agency. This is a good way to find any registered complaints against the company.
Due diligence goes a long way in understanding how much you are charged, the time it will take to become debt free, and the type of services you will receive. Avoid applying for debt settlement programs that require a high advance cost. Find out what the company will charge for its services.
It is recommended to use a company that provides in-person assistance. Most agencies offer in-person via face-to-face, telephone, or internet services. Look for one that offers all three options. It is better to communicate in person than over the phone.
Evaluate any critiques listed about the companies left on your list.
Finally, understand that a company with a non-profit status does not indicate they offer services for free or at a lower cost or even that they are legitimate. They may be using it as a cover-up to hide their very high rates. Again, this is where research and due diligence is a key part of choosing the right debt settlement company in Zephyrhills, Florida.
