Is A Debt Settlement Plan in Lahaina, Hawaii Ideal For You?
Are you unsure if a debt settlement plan in Lahaina, Hawaii, is the ideal option for you? Are you considering bankruptcy because you cannot pay your debts? Have you missed several payments to creditors? If you have answered yes to one or more of these questions, then contacting a debt settlement agency may be in your best interest. However, there are some things to consider before choosing a company.
Finding Debt Settlement Companies in Lahaina
Finding the right Debt Settlement Company in Lahaina can be daunting. You want to work with a company that is reputable, has a proven track record of success, and will be there for you through the entire process. It is important that you do your research on any company you’re considering because accepting terms from the wrong one can cause you more issues.
To check off official complaints, contact your state Attorney general’s office and question them on any of the companies you are considering. In addition to this, you can check online reviews, but focus on the negative reviews more, as these are likely to be more what you want to know about.
Some debt settlement companies will claim non-profit but pad the costs to increase their revenue. Be sure to ask the same questions, regardless of whether them being non-profit or not, to reduce this risk. Sometimes these come in the form of setup fees and monthly maintenance costs.
First Step Of Debt Settlement: Do Your Research
Again, this is a very important part of the process. As mentioned, check reviews and testimonials online and by contacting the Attorney General. You can also look for their rating on the Better Business Bureau (BBB) website.
If you know people who have been through debt settlement, you can ask them for recommendations as well to help speed up the search.
Consider a few factors, including:
Time in business – How long has the company been providing debt settlement services? The longer they have been in business, the more of a track record they have developed. Additionally, the more experience and negotiation skills they likely bring to the table.
Customer Support – What do people say about their support? You want to ensure the debt settlement agency you choose will be there when you have questions or concerns. Always consider long-term support, and not just when you’re going through the application process.
What services are included? – Be sure to ask this question, that way, you will know for sure what they are providing or not providing. The last thing you want is to agree to terms and find out they do very little to actually assist you in lowering your debt.
Methods of contact – Do they offer multiple methods for contact? It is recommended that you setup the first meeting in person. The face-to-face approach often provides better results after making the human connection. Then, once you accept the terms and get the setup, you can use online or over-the-phone methods to make your payments. Most legit debt settlement companies offer all three options.
Repayment Periods – Are they offering a range of repayment lengths, such as 12 months, 2 years, 3 years, etc.? If the debt settlement company you are speaking with is not offering short-term options and only focus on longer repayment periods, it can be a red flag. The reason is they know if you accept a longer period with smaller monthly payments, they will make more money from interest than if you were to select a shorter period with larger monthly payments.
Beware Of Debt Settlement Scams
Although most debt settlement companies are probably legit, scams do exist. It is always best to be cautious. If you are called out of the blue by someone claiming to be a debt settlement company, the best approach is to get their company name and tell them you will look into it. You never know who is on the other end, if they are true with the company or just saying enough to get information out of you.
However, if you have researched a company and you’re contacting them, they are likely licensed and official. Unfortunately, that does not mean they are not finding ways to rip off the consumer. Below are a few things to pay attention to and avoid paying more in debt settlement fees than you originally owed.
Paying before settlement – If they are requesting service fees upfront and not just a minimal application fee, keep looking. Companies that do this are often not going to work their hardest to get you the lowest amount possible. In fact, they may do little to nothing to get your creditors to take a lower payoff. Sometimes, they may even claim to have taken care of it, and you do not know until the creditors are suing.
Avoids telling you about risks – An honest debt settlement company is not going to hide the risks of entering in into a settlement. It is best to find a company that is transparent from the start, including letting you know it will damage your credit and that you could lose any property used as collateral.
Makes false promises – Creditors are not required to accept a lower amount. A debt settlement company can only attempt to negotiate with them to reduce the debt. Usually, creditors understand if they do not accept a lower amount, they may not get anything if the consumer enters bankruptcy, but this cannot be guaranteed. If they try to guarantee a specific outcome, don’t believe it.
Advantage Of Using Debt Settlement Services
When it comes to getting out of debt, the best method is always going to be just to pay it off. But, if you are not in a position to make your minimum payments, debt settlement can be a better option than bankruptcy. Below are a few benefits to choosing this option as a last resort:
Lower payoff amount – Because debt settlement services work as the middleman, creditors are more likely to agree to a lower payoff amount. They know if consumers are going through enough hardship to contact a debt settlement company, it may be the last chance they have to receive some type of installment.
Faster payoff–Because debt settlement helps lower the total debt owed, sometimes up to 60% or more, you can be debt free much faster. With most services charging little as 10% on the settled debt, you can pay back debts in just 1-3 years instead of 10+ years.
Single payment – When you have multiple creditors being paid off, you will no longer have all these dates to remember and juggle around on payday. Instead, you have a single payment and a set amount to make each month.
The Risks Of Debt Settlement Services
Credit score – Trying to settle your debt can have devastating effects on your credit score. If a creditor sees that you have applied for debt relief, they will automatically cancel any plans they have for account reviews or remove late fees. Some creditors may report you as delinquent on your payment history until they are updated with a positive balance, resulting in a low credit score.
Taxed as income – Even though debt settlement is a beneficial service, it will complicate your financial situation in the long run since it gets taxed as income and will only offer a partial solution to your debt problems. However, this should not deter you from paying your debt off!
Hidden Fees – If you have unmanageable debt, it’s worth exploring all your options. Debt settlement services can be a quick fix to get some relief now. However, they’re not the best choice long-term because they often come with hidden fees. A better solution is to explore debt relief alternatives or discuss debt settlement with creditors when you make a budget work.
Reason People Use Debt Settlement Options
People are starting to realize that they have a better option for getting out of debt than entering Chapter 7 bankruptcy. Anyone who has been through bankruptcy will likely tell you it’s a nightmare, and recovering from it takes forever. Even once you start rebuilding your credit score, bankruptcy will always appear on a credit report pulled by creditors, employers, etc.
With debt settlement, it is removed from your credit report after 7 years and no longer visible. This is another perk in addition to only having a lower payment and getting out of debt fast. Most debt settlement agencies will also keep in touch to ensure you don’t have any questions or concerns throughout the repayment period. This lets you know they are there to help.
Is Debt Settlement Right For Me?
Whether you decide to settle your credit card debt or not, our experts will help you determine what your best options are. Even if you decide not to settle your debt now, it’s never too late to start over once your financial situation changes.
In their efforts to settle your credit card debts for less, debt settlement companies offer a few services. First of all, they negotiate on your behalf with your creditors to get a lower settlement amount than what you currently owe. With these steps, you may be able to pay off your debts all at once or over a few years so that they don’t have as much impact on your monthly budget.
There are other reasons to avoid debt settlement as well. In the event that your debts are too high to settle and/or you owe money to creditors, it may be better for you to consider alternative options, like a consolidation loan, which will allow you to pay off all of your creditors at one time or over time. You should consult with a credit card debt expert so you can determine if settling your debts is right for you, and they may be able to negotiate a lower settlement amount.
Final Thoughts On Debt Settlement Services in Lahaina, Hawaii
When it comes to paying back debt, it can be a struggle. Credit cards often have high interest, a personal loan is not much better, and most people are one major unexpected expense away from falling behind on payments. Settling debts will damage your credit score, but it is also easier to recover from than bankruptcy. If you’ve already missed several payments, your credit score will already be decreasing.
Don’t be afraid to ask for assistance. Contact a local debt settlement company in Lahaina, Hawaii, and ask any questions you have. Find out how they can help, what it will cost, and how long before you can be on the road to financial freedom once again.
