Debt Consolidation

How To Decide If Debt Settlement Is The Right Option For You?

Too much debt can ruin your life. With the kind of lifestyle we follow these days and the kind of monetary system we are living in, it is very easy to accumulate debt. But, you cannot say the same thing when it is about paying off those debts. Even though it is tough, we have plenty of options to deal with this problem – debt settlement is one of them. However, before you go for it, it is important for you to look into the various aspects associated with the same in order to determine if it is the right option for you.

Assessment Of Income And Expenses

As a general rule, if your average monthly income is high enough to cover all basic living expenses and still save you a decent amount of money, you may be able to resolve your financial crisis by using a loan settlement program. Basic living expenses may include anything you need to live a normal life, such as groceries, gas, utilities, housing expenses, and others. However, if your expenses exceed your income, it does not make any sense to look at debt settlement as a viable solution. The idea is to find out accurately if your financial situation allows you to keep paying your debts every month.

Assessment Of Unsecured Debt

Not everybody can qualify for these programs. There are certain eligibility criteria that you must fulfill. In order to determine whether you meet these criteria or not, you will have to do a thorough assessment of total amount of unsecured debt you owe to different creditors. As a general rule, only debtors with more than $7500 of unsecured debt can qualify for these programs. The actual amount though may vary from one company to another.

Choosing The Right Company

The next step is to find out if there is any reputable debt settlement company in your area. There are so many agencies out there, but it is very important to note that not all of them are genuine ones. You need to be wary of unscrupulous agencies that are involved in fraud and scam. Make sure you do a thorough background check before you sign up with a company. You can check their records by contacting the Better Business Bureau. Another crucial factor to consider in this regard is whether the fee they charge is reasonable enough. For example, you should avoid companies that ask you to make a huge sum of upfront payment.

Comparison Shopping

Every debt settlement company has something different to offer. Therefore, you are strongly recommended to do a thorough comparison of the different offers made by different companies. The idea is to examine the pros and cons of every program. Ask them how the program will affect your financial life. For example, you may like to know whether it will be reflected on your credit history report if you sign up for a specific program. Look into the long-term side effects, not just the short-term benefits.

Always remember, if you choose the wrong program, you may have to deal with certain side effects, such as tax problems, damaged credit, possible collection lawsuits, increased creditor calls, and other such things. Therefore, you must take some time in doing your research before you decide to use debt settlement to resolve your financial troubles.

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Posted in Debt Consolidation, Debt Settlement | 1 Comment »

One Response to “How To Decide If Debt Settlement Is The Right Option For You?”

  1. Richard says:

    Debt Settlement may be the best option for one whereas the worst for other. The screening of financial situation is very important before deciding to go for it. If you have multiple debts accumulated with high interest and you feel like you are in ocean of debts then it may be the right choice for you. Negotiation with the creditors is very important for the settlement program. It can be done if you very well aware of all the legal rights and rules for the debt settlement program. It seems very relaxing that you need to pay the lump sum amount only once and all the debts will be waived off. Actually the amount you have to give after settlement will be less than the outstanding amount because the penalty charges, cheque bouncing charges are not included in the amount. If you can not negotiate to the creditors, you can choose a company. The comparison of two or three companies should be done so that you can get the best for you. The past record of the companies should also be checked. Above all debt settlement can make your life relieved and relaxed from the monster of debts.

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