If you’re in debt, you don’t need anyone to tell you that it can quickly become an out-of-control force, wreaking havoc on your life. Getting in too deep can mean disaster for your credit score, affecting your ability to buy a house, rent an apartment, or even get certain jobs.
The easy answer, of course, is to just not get into deep debt in the first place. Easier said than done, obviously. But what if you already are in too far? If the debt is controlling your life or if you feel overwhelmed by your debt load, you might be able to find relief through the services of a debt settlement company.
What is a Debt Settlement Company?
Debt settlement companies have one job: They help ordinary people get out of debt. They do this through several strategies, but the bottom line is that they are a lifeline to people who have overwhelming amounts of debt and can’t see a way out.
When you are already dealing with so much financial insecurity, it can seem daunting to trust another financial company. After all, that may be what got you into this mess in the first place.
A debt settlement company is different, though. These companies work with your creditors and with you to find a solution that gets you out of debt and makes sure your creditors get paid.
Sound too good to be true? Let’s take a look at four ways debt settlement companies can help you.
Sometimes, all you need is a new skill set and a little help from a professional to get your debt under control.
A credit counselor at a debt settlement company can help you take an honest look at your finances and teach you crucial budgeting skills to help you get out of debt on your own, no new debt or settlement required. The skills a credit counselor teaches, you will also help you stay out of debt once you have your current debt under control.
A credit counselor may also be able to work with your creditors to lower your monthly payments and waive late fees as part of a debt management plan.
Debt settlement companies often offer debt consolidation, meaning a loan that combines all your current debt into one manageable monthly payment.
The company will send lump sum payments on to your creditors, and you will be left paying only the debt settlement company. The payment is often substantially lower than the total of your original payments, and may be easier to handle.
This doesn’t get you out of debt, since it is a loan, but it shifts the debt into a more manageable form, making it easier to make payments and eventually pay off. It can also help your credit score by lowering the number of creditors to whom you owe money and putting positive payment history on your record.
One of the difficult things about debt is that, even if you are not spending more, late fees, penalties, and interest continue to accrue, leaving you with a growing debt pile that seems impossible to get on top of.
This is where your debt settlement company steps in. Often, these companies have relationships with creditors and can negotiate lower interest rates, waived late fees, and lower monthly payments.
This kind of negotiation can help you take control of your debt load and pay off your creditors without having to take on more debt or settle with your creditors.
As their name implies, a debt settlement company specializes in settling debt, or negotiating with your creditors to pay less than you owe.
If other options, either haven’t worked or aren’t an option for you, you may find that debt settlement is your best option.
By settling your debts, your debt settlement company negotiates with your creditors to forgive at least part of your debt, lowering what you owe, and then giving you the chance to pay off the creditor in one lump sum, eliminating them from your debt load.
There are cons to this, and it shouldn’t be looked at as an easy fix, but debt settlement can certainly be a good option to eliminate large chunks of your debt, rather than chipping away at it over a long period of time.
Is it Time to Call a Debt Settlement Company?
We all need help from time to time, and that’s the point of a debt settlement company. To help you take control of your finances again.
If you have overwhelming debt and want help digging your way out, contact us. We would love to find the best plan for you.