Acquiring a debt settlement is one way to deal with debt problems. What are the steps on getting approved for a debt settlement? What points should you remember before seeking debt settlement? Here are some tips for you:
Know the type of your debt. You should be aware that not all kinds of debt can qualify for a debt settlement. Ask your debt settlement company whether the debts you owe are acceptable or not. Usually, the types of debt that are suitable for settlement are personal loans, medical debt, credit card debts- just to name a few. Debts that would not qualify are loans with collateral such as government loans, mortgages, car loans, military debts and loans from Credit Unions.
Calculate your total debts. Before seeking debt settlement, you should be aware of exactly how much you owe your creditors. Deciding whether to get a debt settlement service or to negotiate on your own is up to you. Remember that debt settlement is an option for people with huge debts on their account. This because a debt settlement enables a borrower to slash off as much 40-60% from the original amount of debt owed.
Negotiate tactfully. When negotiating with a creditor, be honest about your financial situation. Be courteous and avoid a threatening tone. Bear in mind that you’ll want to convince your creditor to reduce your debts and being argumentative will not win you anything.
Choose a debt settlement company with care. If you do decide to get a debt settlement service, choose very carefully. Some debt settlement companies may take advantage of your vulnerability or debt situation. If you turn to the wrong company, you may find yourself stuck with more debts than you were before.
Check the company’s background and reputation. You’ll want to avoid debt settlement companies who offer very low monthly fees for a very long repayment period. This is because, instead of saving money, you end up paying more because of the additional interest rate charges. Check from the Better Business Bureau if a debt settlement company has received complaints in the past. If so, how were these complaints or issues resolved? A debt settlement company that has been providing service for a long time is also your best bet.
Set a realistic repayment plan. Debt settlement will only be successful if you can stay true to your repayment plan. How do you plan to keep up with your debt settlement payments? Have you thought about getting a part time job? Perhaps it is necessary to make some changes with your lifestyle. Remember that your priority is to pay off your debts at the soonest possible time.
Don’t settle for less. If a debt settlement service offers you less than 40% of debt reduction, take your business somewhere else. You can usually achieve a 20 to 30% off by negotiating with creditors on your own. If you must pay for a service to get a debt settlement, you should be able to make at least 40% to 60% of savings.