Needless to say – you are overwhelmed with your financial picture. As a consumer you have been bombard with unsolicited mailers and advertisements on television about debt settlement. But what is debt settlement and how can it help?
Debt settlement is when a third party company negotiates on the behalf of the consumer to reduce outstanding unsecured debts. The question the consumer needs to ask themselves is debt settlement a good alternative for getting out of debt. The consumer needs to be aware of all the steps involved in using a debt settlement company.
When selecting a debt settlement company, the most important issue is having a clear understanding of how debt settlement program works. Here are a few steps to determine if a debt settlement program will work for the consumer:
• List all of your unsecured debt. Is it more than $10,000?
• What is the total of your current monthly minimum payments.
• What can you afford to pay monthly?
• Are you currently late on your unsecured credit cards?
• Are you committed to establishing a budget and living within you current means?
Before deciding on a debt settlement company, the consumer needs to ask themselves the following questions:
• What has caused my financial situation, i.e. lost job, medical emergency
• What are my alternatives, debt consolidation, debt counseling, bankruptcy
• Is the consumer ready to work their way out of debt
• Does the consumer understand have their credit score will be effected
If you have answered yes to any of the above questions then you are a candidate for debt settlement. The key to completing a debt settlement program is knowing 1) you can make the new established programs monthly minimum payment, 2) know that the debt settlement company will start to negotiate with the lenders when you have approximately half of your lowest balances in an trust account, 3) know your credit score will be effected in the beginning, and 4) know you maybe subject to taxes on the unpaid balances.
Now is the time to decide that debt settlement maybe the best alternative for you and your family.
