subject: Debt Settlement Solutions – How To Legally Eliminate Unsecured Debts [print this page] Debt Settlement Solutions How To Legally Eliminate Unsecured Debts
So, what is this how to debt settlement all about? Basically, the goal is to get your unsecured debts "settled" for much less than you actually owe your creditors. A great debt settlement company can reduce your credit card debt by 49% or more and they can often accomplish this in a reasonable amount of time. The priority is to help you avoid filing bankruptcy and ruining your credit for 7 years or more. Plus, now a days, filing bankruptcy does NOT guarantee that you won't have to pay those debts back!
How does it work? Well, companies will want to make sure your debts qualify for the program. Certain unsecured debts do not work, such as student loans. Once you are qualfied, a debt settlement company will take the total of all your payments, ask you how long you want to take to pay the payments off and come up with a payment plan. If you were paying $1000 a month on all your credit cards, you can expect to pay somewhere between $250 -$500 a month in the program. A good debt settlement company will then put your money into an escrow account each month and as the debts are negotiated, they are paid off through the escrow account funds. So, the more you pay each month, the faster you can be debt free. Even if you choose the 4 year plan, just imagine how long it would take paying the "minimum payment plan". It cost twice as much and would take years and years to pay off those cards!
Does debt settlement affect my credit score? Yes, it will. Do you have perfect credit right now? Probably not! Debt settlement will hurt your credit score, but it is nowhere near the severity of having a BK on your credit report. Those take YEARS to get off! Chances are, if you need help and have maxed out your cards or even missed a couple payments - your credit has already been adversly affected from being in this situation. Debt settlement will allow you to pay off your debts completely in a few years and then you can focus on rebuilding your credit score and getting your life back on track!
What are the costs invovled? Most of the time companies charge you based on the amount of debt you have. You should not have to pay this money upfront, it should come out of your fees each month. If you have $600 in credit card bills each month, lets say you pick a 4 year plan. Now you are paying $165 a month and that includes the debt settlement fees. It's a great way to increase your monthly cash flow AND pay off all your debts fast. Remember, the more you pay each month, the faster you are going to pay off your debts.
You have read all the info, now its time to look at the facts.
You can:
- File for BK and ruin your credit for many years, plus probably have to pay off the debts anyways on a payment plan WITH interest.
- Keep doing what you are currently doing. Struggling to make your minimum payments each month. Keep paying those outrageous fees and pay your debts off in what, 20 years? If you're lucky....
- Choose Debt Settlement- damage your credit temporarily (not destroy) while making affordable payments each month, increasing your cash flow right off the bat and actually paying off all your unsecured debts in as little as a year.
Good luck and use those cards wisely when you do get out of debt! This has been a how to on debt settlement.
