Posts Tagged ‘reduce debt’

Debt Programs – Have They Worked For You?

 

There are pros and cons to enrolling in a debt reduction program.  That includes debt settlement, debt consolidation and credit counseling.

I want to know if you (or anyone you know) have ever signed up for any of these programs and if so did it help you get out of debt?

You can leave a comment to let us and everyone else know.


Can Debt Settlement Reduce Debt by 40% or More?

Debt settlement is a process where your outstanding debts are eliminated through negotiation with your creditors. You are required to pay only a portion of what you originally owed your lender.

So why will your creditors agree to settle your loan at a reduce amount? Because they are protecting their investment. If you were to file for bankruptcy, they stand a chance of not collecting a dime from you. By settling with you, they can at lease get some of what they are owed. When debt settlement companies get involved, the creditor has less to worry about. They know that you want to repay your debt even if it’s not the full amount. They also save on collection agency and collection attorney charges which may be as high as 40% of the funds recovered.

Debt Settlement Can Reduce Balances But…

Credit card debt is a major problem these days and medical debt is one of the major causes of personal bankruptcy. Many are at wits end, worrying about debt they cannot pay and many are looking at debt settlement as a solution to reducing that debt.

Debt settlement is a process where your outstanding debts are greatly reduced and you are required to pay only a portion of what you originally owed your lender. You could settle up to 40% – 50% of what is owed.

Debt settlement can have you debt free in a 12-36 months compared to years of paying high interest balances.

What About All The New Debt Relief Companies?

Debt relief is big business because many people are in financial trouble these days. Stinking economy, delinquent mortgages, credit card debt at all time highs, all provide opportunities for the scammers to jump in make some money and move on.

It only takes a few bad apples to spoil it for everyone else. So beware and do a little research before signing a contract with any debt relief company.  

You should stay away from companies where their web site that is newer than a few months old.  To check the age of the web site go to any domain registry service (for quick checks I use whois.com). Type in the web site domain name, scroll down and it will show you when it was created.  

Debt Solutions – which are best for getting out of debt while maintaining your credit?

 

Some debt solutions are better than others and some affect your credit more than others. So which is best?  Use the following to help you decide. 

 Get your 3 scores for free

DIY

 You will not necessarily get lower interest rates on existing balances unless you do the negotiations yourself.  You can save money by paying more than the minimum monthly payment and lower interest rates if you are successful in your negotiations. 

On time payments will help your credit score and will make getting new credit and/or lower rates on loans easier. Very positive.