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Debt Settlement is a relatively new service being offered in the United States and it has become increasingly popular due to the current economic crisis. The service itself is different from other services with the same goal and so it is very easy for clients to be confused about such programs. Consumers should be fully aware of what this service is and what it isn't before enrolling.
Debt settlement is a program for those with financial hardship. If one does not struggle to pay their bills they should not typically enroll in such a program. This service is one which offers a compromise between one's current hardship and filing bankruptcy.
Monthly payments do not go directly to ones creditors. Payments only go towards two places, fees and escrow funds. The escrow funds are used to settle the accounts, typically in a lump sum, with the creditors. As it often takes months or even years for enough funds to accrue in escrow, some creditors do not see any money at all for a long time.
This service does not completely stop creditor calls. As creditors are not getting paid they are likely to call looking to collect money. There are steps settlement companies can take to avoid debt collector calls but the laws to stop creditor harassment typically only apply to collection agencies not creditors. If a person is preparing to enter a settlement program they should also prepare to deal with creditor calls. Note that creditor and collector calls to one's work place can typically be stopped in debt settlement.
Settlement quotes are an estimate only. There is truly no way to guarantee an exact quote for debt settlement as it varies depending on the creditors, the client's financial situation, and other factors. Therefore the initial quote and payoff time may be better or worse than estimated. In these cases the client would get the remaining funds returned to them or need to make additional payments respectively.
Debt Settlement: http://www.debtsfreelife.com/Debt_Settlement.zip
Debt Reduction: http://www.debtsfreelife.com/Debt_Reduction.zip
Debt settlement is not for those who have the luxuries of choosing from various debt programs. It is for those with dire hardship who would rather not file bankruptcy.
Debt settlement is not for those who simply want to "save a buck" on paying their debts. It is not mean for those who simply want to save money after a shopping spree. It is not a program designed to "stick it to" the big corporations either. When real hardship does not exist, creditors are not much likely to settle and much more likely to take legal action against the person simply seeking an easy exit from their financial situation.
Debt settlement is an alternative to filing bankruptcy. It is a way to move forward for people whose financial situation is such that even if they dedicate all they have to paying their bills they cannot move ahead or even continue to move backwards. It is for people who skip meals or are late on rent to pay a credit card bill minimum payment. It is for those who have to use one credit card to pay another and as a result have accrued debts far beyond their means. It is also for those who have had a medical emergency that resulted in massive debts they cannot afford to repay. It is for those who want to pay creditors what they can afford but simply cannot afford to pay what creditors are charging them on a monthly basis.
Before considering debt settlement is sure to give a hard look at your financial situation. Perform a full analysis of your financial affairs. Who do you owe and how much? How much are your payments vs. your income? Are you making progress on your debts or continually falling behind or getting nowhere? Do you have other assets or people that can help you? Are there lifestyle changes you can make to help you to get on top of your finances? Is there any way you can increase your income (even if temporarily to help get ahead? Overall one must determine if their hardship is insurmountable on their own.
Once you have concluded that there is no way |