The Process of Debt Settlement in Coralville, Iowa
Are you being crushed by consumer debt? Are you seeking a solution? Is the stress of credit card bills keeping you from making it from one week to the next? This would be the best time for you to turn to debt settlement solutions located out of Coralville, Iowa.
For those that are financially overwhelmed, debt settlement is the best solution to go with.
There are more people in the world today applying for and getting credit cards, business loans, and student loans, including unexpected medical costs. Some people have outstanding debt, which comes to more than the income they have; this means debt settlement services has to turn them away, for they are unable to accept them as a client.
Usually, it is those with debts starting at $10,000 + that are the best applicants to use a debt settlement service. Most debts are accrued over time through credit cards, student loans, and housing costs. Depending on your circumstances, working with a debt settlement company may be in your best interest.
What Would a Good Reason for Working It Out with A Debt Settlement Company?
What are some good reasons for someone to work with a debt settlement company to get rid of their debt by using their debt settlement programs? One good reason is it would be better than filing bankruptcy. Once filing for bankruptcy, not only does it stay on your credit report and hang over your head for the next 10 years, but it will also follow you for the rest of your life!
How do you ask? Anytime you fill out an application (whether it be for credit cards, student loans, and/or a home loan, including for employment, etc.), you will be asked if you have ever filed for bankruptcy. You also will have to face being turned down just because you, at one time in the past, filed for bankruptcy. If at some point you should get caught lying about it, you could not only be charged with fraud, but your employer will have the right to fire you, and let’s not forget that you can end up doing time in jail!
If you are out of options, it would be in your best interest to go with, but only when it is your last option (besides going bankrupt). Choosing a settlement over bankruptcy has its advantages. For instance, you would not have to cope with the lasting effects it will have on the rest of your life.
Bankruptcy stays on your credit report for 10 years, whereas a settlement will be off in 7 years. Once the debt has been paid off, there will not be anything hanging over your head like you would have with bankruptcy. Unlike bankruptcy, a settlement leaves no record for others to see.
Those who have a hard time financially because their income is not enough to meet their debt, and that is when a settlement can be beneficial. However, only take it into consideration when all else fails, so if your options have all run out, then you should go with a debt settlement program over going bankrupt.
It is in a debt collector’s best interest to work with you and get you into a debt settlement program. This is because they already know when someone files for bankruptcy, they more than likely will never get any of the money that is owed them.
Pay off debt quicker with debt settlement companies. Your debt could be paid off between 2 to 4 years if you get a good debt settlement service, or it could be paid in under 1 year. All other options, such as personal bankruptcy, consumer credit counseling, and debt consolidation, will take 3 to 5 years to pay off your debt.
By choosing debt settlement over consumer bankruptcy, you will be protecting your credit score. Debt settlement is not a public record, and it is not accessible for the world to see as they are able to do with bankruptcies. Debt settlement does not do any damage to your credit rating, but bankruptcy does. Until the debt is paid off, your debt settlement will show up on your credit report. However, your credit score will never decrease because you are working with a debt settlement program.
You may not have to surrender your credit cards. As long as the debt settlement contract puts a restriction on you being able to use your credit cards, you will be able to continue using them (but they should only be used in dire circumstances).
No more stress over debt management! Once your debt has been settled, you will only have to come up with one monthly installment while the debt settlement company takes care of the different creditors you have and handles it for you.
Your monthly bills and interest rates would be substantially lower if you consolidate them all together, and you will obtain a payment plan that is more convenient.
Settling debt (s) Has Its Drawbacks
You are going to find that debt-settling programs do have some not-so-favorable drawbacks. There is no guarantee that the negotiation deals will be accepted by your creditor(s). It will affect your credit standing temporarily. You may end up having income taxes, which only happens if the creditor has already terminated your line of credit.
Not everyone knows it, but in the long run, paying off your debts yourself (assuming you are able to do so) would be so much easier; just think how relieved you would be without all the stress that a person endures while going through a debt settlement program. Debt settlement programs were designed to help those who really don’t bring in enough income to get out of the mess by themselves.
There are people who actually put their vehicle and even their home (among other things) up as collateral in order to be able to get the debt settlement loan. Although, if you are not capable of paying on time, you will lose whatever is put up for collateral, and collateral is usually a requirement for the loan. When a person is involved in a debt settlement, it is hard for others to consider them a reliable source. Also, there is the company will generally demand collateral to be assured of compensation in case something happens that you cannot pay them back.
It is important that you find out if there will be hidden costs (charges they did not initially talk to you about). Debt settlement may look appealing with having your monthly bills and interest rates reduced. There is a possibility that by the time you have the debt settled, the total cost comes to more than expected. It more than likely will give you an extended period that, over time, will cost you more.
You may have to pay income taxes on your debt settlement. It is possible that you will have to claim the forgiven debt as taxable income.
Does It Cost Very Much for Debt Settlement Services?
An application fee is charged, but it’s usually small. The service fee is approximately 10 to 20% of the amount you pay them over a few years. Depending on the amount of your debt, after the debt settlement services do a little negotiating with the creditors. Let’s say that you owe $30,000, and the amount you are going to pay back would be around $15,000. An added $3,000 isn’t so bad.
What Makes Debt Settlement Work?
Debt settlement is a process of the settlement company contacting each of your creditors individually and negotiating deals to reduce the amount you owe that they will agree upon. These negotiations usually get, on average, a reduction of around 50% of the total you owe them, giving the client a very steep and quick reduction. This rate will be between 40 and 60% on average. If it was not for the debt settlement company as a go-between, the creditors would realize they would end up with nothing should the client file bankruptcy, and this helps to motivate them.
Debt settlement is the best way to go if it is between that and bankruptcy. During the time one is going through a debt settlement program, they are going to be facing some hardships, as their credit will be affected, with the possibility of not being able to receive a new line of credit or financial loans.
If bankruptcy and debt settlement are the only choices you have left, then your best bet is debt settlement. However, it should not be the first choice you make. Prior to choosing a debt settlement program, take into consideration all available options. It should not be thought of as a means to get out of paying all that you owe your creditors but as a way to pay your creditors what you can on the amount you owed them.
Keep in mind that settlement agencies will vary in their price, quality, and reputation. Make sure you are choosing one which is considered to be rated all three of these!
Is It Really Worth It?
Although your credit score will hurt a little throughout the program, once the debt has been settled, you will have the ability to improve upon it. As many as 25% of those working with a debt settlement program have their debt settled in less than 1 year. All others meet their goal between 2 and 5 years. Rebuilding a nest egg may take time, but it will be possible. If you land a good debt settlement company that will keep in contact with you throughout the program, they are not going to let you go it alone!
Things To Consider from Debt Settlement Programs in Coralville, Iowa
It would be wise to be prepared, so do your research prior to choosing the company to go with. This can be done by contacting the Attorney General, along with the consumer protection service. You can find out if there have been any companies that have currently and/or previously registered with any of the companies/agencies.
Be prepared about the total cost, how long the debt takes to be settled, and the different types of services they provide. Stay away from debt company services asking for large up-front fees. Always calculate what the total costs will be that you are investing in their services.
The best companies will offer phone service and internet services and also includes local support. They should at least offer phone service and local support. Being able to communicate over the phone is important, but it is more important to be able to consult with the specialist in person as well.
You need to remember that “non-profit” does not mean you get a solution for free, that it is not inexpensive, or that it is a legitimate company. Several companies charge excessive amounts; however, it is done in a way as to not be noticeable to you by concealing it.
It could be helpful to read through the testimonials of the individual companies.
