Millions of families are struggling financially and have reached a fork in the road where they have to decide which way to go to get out of debt for good. If this sounds like you, take comfort in the fact that you do have options. Depending on your financial situation, you may have decided that debt settlement is the best way to go, since it can cut your debt by 50% or more.
If you've decided that debt settlement is your best choice and are sure of it, it's time to get to work. So, you can see that debt settlement can be complicated, and it's important to be well-informed when deciding if you want to try to negotiate with your creditors on your own or if you want to hire a professional to represent you.
If you're really thinking about the "do-it-yourself" method, here are some things you might want to think about:
- You can't be scared easily. Your credit card accounts must be behind on payments for you to be eligible for settlements with your credit card companies. Obviously, if you don't pay your bills on time, your creditors and/or collection agencies will get in touch with you in some way. Unfortunately, the messages you get, whether they come in the form of phone calls or letters, will always be threatening. I know it's hard, but you have to be ready for this kind of conversation, and you can't give in when someone threatens you. Of course, this will be hard because you won't always know if the threats you get are real or just an attempt to scare and intimidate you, but most of the time it's the latter.
Caller ID is a must-have! Don't kid yourself, because creditors and collection agencies will be calling you all the time. If you took the time to answer each call and try to talk to these people trying to get money from you, your day would be gone. So, if you don't have Caller ID already, you should get it. If your Caller ID says "toll-free number," "out of area," "unknown caller," or "incoming call," you can be sure that a bill collector is trying to get in touch with you. Most of the time, it's best to just let these calls go to voicemail. The only time you should talk to bill collectors is when your debt is far enough behind that you can reach a good settlement agreement.
If you think it would be easier to hire a professional debt settlement company to help you through this long and difficult process, be aware that there are some companies whose main goal is to get your money instead of helping you get out of debt. Here are a few signs that you should watch out for:
- Unrealistic fees: The cheapest debt settlement company isn't always the best, but you can find honest, ethical, and reputable firms with reasonable fees that won't make the process of debt settlement too expensive to consider. Fee structures vary from one debt settlement company to the next. Some charge 15 percent of the total amount of debt to be settled, while others base their fees on how much money their clients actually save at the time of settlement. I've seen these fees range from 15% to 25% of the amount saved.
- Fees paid in advance: I understand why most debt settlement companies want their fees paid in advance, but I don't always agree with this strategy. You see, before a settlement with your creditor is finalised, a lot of work and planning has already been done behind the scenes, and companies want to make sure they'll be paid enough for their time and money. Also, I think that debt settlement companies should want to pay your creditors as quickly as possible so that you, their client, can start to feel better sooner rather than later. This is hard to do if all of your money goes to the company that says it is looking out for your best interests. You can find a company that won't take your money until you and your creditor have come to an agreement. It may take you a few minutes and a few mouse clicks, but you can find this kind of company (s).
High-pressure sales tactics: If an employee of a company talks to you more like a salesman than a professional debt counsellor, RUN, don't walk, as fast as you can. You're going through a hard time, and the last thing you need is a high-pressure salesperson who takes advantage of the fact that you might be feeling weak in order to "close the deal." Instead, you should make sure you're dealing with someone who cares about your financial problems and is taking the right steps to help you reach your goal by getting rid of your money worries.
Congratulations on making up your mind to get out of debt. It's not easy to deal with money problems, so you should be praised for taking the time to do research and come up with a plan.
