Debt Settlement
Debt Settlement programs are structured to help people repay their debts by negotiating
the amount owed instead of the interest. The programs will range anywhere from 1-3
years depending on the amount of the debt.
Debt Settlement programs provide immediate monthly relief. You can typically modify
your payment if you encounter an unexpected hardship without affecting your program.
The debt settlement breakdown
Is there a fee for debt settlement?
Will debt settlement hurt my credit?
The debt settlement breakdown
Many people chose debt settlement without doing their homework first. I do believe
these programs can work but only if the company you chose is credible. I will give
you an example of how debt settlement works:
Debt load in the amount of $65,000 will be negotiated anywhere between 30-50 cents
on the dollar. The length of the program will be 36 months with a payment of $1.200.
What this means to the debtor is that you will pay the debt off sooner. Instead
of 30 years you are looking at 3 years not to mention a savings of $108,000 in interest.
Note: It is important that I mention you do not need to be behind in your payments,
however your accounts must age for at least 2 months before negotiations can begin.
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Is there a fee for debt settlement?
The answer is yes. These companies do charge a fee. Most are for profit and will
charge anywhere from 10-15% of the debt enrolled. As I stated it is important you
ask certain questions before making any decisions. The fees should be clearly outlined.
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Will debt settlement hurt my credit?
The answer to this question is yes. No matter which option you choose (other than
cash), all will have a negative effect on your overall credit score. The quicker
your debts are negotiated the less your credit will be impacted. Another reason
you will want to choose a credible company.
Getting out of debt will take time and dedication. Your best defense is to be proactive
before your circumstances spiral out of control. What you need to remember is no
matter what your situation, there is hope.
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