What You Need to Know About Debt Settlement While You’re Unemployed
Debt Negotiation Services
Is Settlement a Debt “Cure”?
More folks than you know want The Debt Cure. Many believe debt settlement is the easy way out of high credit card bills. What is it, how can you get it, and does it work?
Wish you could just sit down with an account rep from your credit card company and talk freely about your concerns over credit card repayment? Wish you could explain to them that you really want to repay that $5,000, $10,000 or even $20,000 but since you’ve been laid off any money you bring into your home goes to supporting the basics for your family? Because you believe that if you could get face time with this real human person that surely he or she would sympathize with your plight. You can pay part of your credit card balance, but not all of it…and that’s certainly better than nothing at all, right? Essentially this scenario that you’re imagining is debt settlement.
Debt settlement is the increasingly popular practice of creditor-debtor negotiation for the purposes of slashing balances owed on accounts such as credit cards and for outstanding medical bills.
Debt Settlement Companies
Companies that provide debt settlement services often also provide credit counseling, debt management, and other financial advisement. When you hire a company to manage debt negotiation you must understand that you will pay for these services—they aren’t free. Popular and reputable companies have forged solid negotiating relations with many of the most common creditors. Settlement is surely possible for you. However, you will fork over a lump sum of cash to pay off your credit card company for the agreed upon settlement, plus an additional payment for the settlement/negotiation services rendered.
Debt Settlement Attorneys
Attorneys that specialize in debt settlement provide similar services, but offer a variety of other legal counsel, including representation should bankruptcy be a necessary option. You will be expected to pay attorneys fees, which are usually priced appropriately.
DIY Debt Settlement
Perhaps one of the smartest ways right now to leverage credit card settlement is to try negotiating yourself. Financial advisors suggest you let your payments become delinquent for 60 days before contacting your company. Then make contact and start explaining your situation. In many cases consumers successfully settle their own credit card accounts. Be prepared to offer a lump sum cash payout to settle AND to take a credit hit for the reduced settlement.
As attractive as debt settlement may be, it’s not without consequences. First, you need upfront cash to pay off the agreed upon settlement. Second, your creditor will report the settlement to the credit bureaus, so your credit rating will take a battering. Consider carefully your options for dealing with debt obligations.
Tip: If you already have debt collection agencies harassing you via phone and/or mail, find out right now how you can stop it so you can give yourself some breathing room. Read about your rights under the Fair Debt Collection Practices Act.