Debt Settlement – One Way To Pay Off Bills
November 17, 2009 by Layla Vanderbilt
Filed under Credit Card
This economy has caused many Americans to reevaluate previous beliefs about debt. As a result, many people are going out of their way to avoid incurring new debt, while others are focused on paying down preexisting debt. However, some people are in the unenviable position of feeling absolutely overwhelmed by high levels of credit card debt, medical and health care debt and other types of unsecured debt. Many of these people feel that they have no alternative other than bankruptcy, but they do not fully comprehend the effect that bankruptcy can have on their lives going forward.
A method a lot of folks haven?t thought of is debt settlement. Lenders are short of money, as shown by the Federal government?s demand that they stock up on billions of dollars for the accounts they maintain. Debt settlement companies work with account holders and banks to pay off a person?s bills for less money than is owed. So, instead of a person only paying the minimum payment for many years, struggling to settle a bill for $20,000 on just $50 each month, they can come to an agreement with the person?s credit account holder to make a better deal.
Most American’s believe Bankruptcy is debt settlement. It is not! It is a ‘final’ alternative too often mistakenly sold to American’s as the only solution. Certainly Chapter 11 or Chapter- can reduce debt. Even eliminate it. It can also leave you unable to borrow, or obtain a mortgage for seven years or longer. Bankruptcy is a last resort.
One can settle debt outside the courts. You are an honest American who always paid your bills and your debtors may wish to help you continue to do so. Today lenders and bankers are starved for cash. Unresolved debt not only hurts you as the phone constantly rings, and the notices pile up, it is hurting our lending industry and our economy.
There are still other benefits to debt settlement. This method allows you to avoid unfair collection practices and harassing phone calls by collection agents, attorneys and debt collectors if you negotiate a settlement. Once you negotiate a settlement, those individuals may no longer call you, which means that you will no longer feel a need to avoid the telephone or feel stress every time you see a number on caller ID that you do not recognize.
For workers facing reduced income or we hope temporary unemployment a Credit Counseling Agency can see your fees reduced on revolving credit accounts (credit cards), and can negotiate with the your lenders to see your interest rate reduced. The Credit Counseling Service will charge a nominal monthly processing fee for this (usually $35-50 per month). This fee is necessary to cover processing costs. You will pay one payment monthly to the Credit Counseling Agency who then will pay the negotiated reduced monthly payment to each creditor. The Credit Counseling Agency will ask you to sign a contract. Usually this process reduces your monthly outlay in bills ‘due’ to one quarter of what they were, while reducing the long term length of that debt. These services are offered over the Internet and resemble familiar ‘bill pay’ features. Credit Counseling Services also offer consumers advice on how to borrow money by providing articles, and advice on how to make and keep a monthly budget. This includes teaching the understanding of monthly fees, interest rates, and long term goals when using credit cards. They even provide advice on how to choose a lender or mortgage alternatives and rates. And for those of us retired or disabled it might be time to ask questions regarding ‘Reverse Mortgages’.
Debt settlement businesses work with a person do figure out which settlement method will fit their needs. As soon as they determine how much total debt you have with all your accounts, they will try to work with your lenders to get the total lower. You could be asked to pay a single lump amount or possibly payments each month. If you have no savings available, a skilled debt settlement company will accumulate the cash for you put it towards an account used to pay off your bills.
Debt settlement is a win WIN! It not only reduces your overall debt (even sometimes by more than half), it reduces the monthly amount you pay out, and within but a few months of using a Credit Counseling Agency you probably will see an increase in your overall credit score. Credit Counseling Agencies can be found on the Internet, at your local Yellow Pages, or by contacting local churches, synagogues, mosques, or social service agencies. In a time of losses it is time to win.
Layla Vanderbilt is the webmaster for a leading website that offers for debt consolidation advice and guidance.
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