Did you just enroll in a debt settlement program? Congratulations! You have taken a big leap in resolving your debt. Debt settlement can help you pay off your debt, typically within 24-36 months as we normally recommend.
However, your own debt settlement program also needs your help, in order to be truly successful. You cannot just leave everything to a debt settlement company because they also need your cooperation to make things work and maximize the possible results.
A good partnership between you and your debt settlement company is needed once you sign up. Let us break down this “partnership” into tips to help you succeed in a debt settlement program you signed up for.
Understand what you signed up for
Like any other matter that involves finances, a debt settlement program also deserves serious attention from you. You cannot just simply ask for a debt settlement application, sign the papers, and nod your head in every item of the terms and conditions. You need to ask the questions that are inside your head. Don’t be shy! You need to really understand what you are getting into to avoid confusion and misunderstanding that result in poor relationship between you and your debt negotiators.
The problem with some clients is that they think debt settlement is something they already know and that’s why their expectations are already set. Most of the time, for example, they confuse it with debt consolidation then go irate when their expectations were simply a result of misconception.
This is where things could slow down and the whole debt settlement process is affected. Some clients would not respond to calls, ignore e-mails, and suddenly stop paying their program. Time and efforts are wasted that way.
Provide accurate financial details
Skewing your financial details during the pre-qualification stage of debt settlement can get you into a debt settlement plan that is not fit for your needs. Either the plan would be too easy on your debt, or it would be too hard for your budget. If it’s the former, then we will not be able to pay off the debts as fast as possible. If it’s the latter, then you might just think that the debt settlement is causing you financial burden and decide to quit at once. Either way, it’s not the best fit for the debts we are trying to resolve.
So, be honest and don’t provide inaccurate details. In any case, it is always our best intention to create a customized plan that fits the needs of the client and his or her budget. If you think you can’t make the payments, you need to tell your debt negotiators so that they can create a revised debt settlement plan for you.
Do provide your active contact numbers
It is of utmost important that a debt negotiator can reach you anytime, in case something pops up and they need information that only you can provide. Likewise, debt negotiators could call you to inform you of a possible settlement, and they would need your consent to say yes to a creditor’s debt settlement offer. Debt settlement offers are time sensitive so you need to be there to avoid wasting the chance of a good offer.
In case your contact details change while you are in the program, make it a point to update your debt settlement company as well.
More important, as we have mentioned earlier, is the cooperation between you and your debt settlement provider. If your debt negotiator calls you, you also need to answer him or her, or reply to email correspondences at the soonest possible time.
Opt for aggressive debt settlement plans if your budget allows
By aggressive, we mean fast and relentless payments to your savings account. If upon checking your budget, you believe you can still afford to make bigger monthly payments to your own trust account, then do so.
If you have extra money from side jobs or bonuses, deposit that amount into your trust or escrow account. This will help you save faster, which means that your debt negotiators can begin the negotiation process with your creditors as early as possible.
Likewise, having enough cash in your trust account is a known advantage in debt settlement. The reason is that creditors or debt collectors prefer to get a lump sum rather than staggered payments, so if you have enough cash reserve, negotiators can leverage that availability of cash in order to get better debt reduction rate.
Avoid missing the payments or adjusting payment dates once a settlement has been negotiated. Once your debt negotiator and your creditor or debt collector have arrived at a settlement amount and signed a debt settlement letter, the repayment of debt begins. This could either be a lump sum or a staggered payment, depending on the agreement.
In the case of staggered payments, once a settlement has been agreed, it is important that you can make creditors trust you with the monthly deposits. You don’t want to keep changing or postponing your deposits; you want to make sure that there is money in your escrow account on the agreed date between you and your creditor. Otherwise, if you keep on asking for grace period, your creditor might withdraw the settlement offer, and you owe them once again.
Know how to handle debt collection activities
Being in a debt settlement program could trigger even more aggressive debt collection activities. This is because part of a debt settlement strategy is to stop making the monthly payments to your credit card accounts, as it is never worked for you before.
When you stop making the payments, creditors begin to scramble for the amount you owe and that’s normal because it is their investment.
However, it is important that you stay grounded and avoid panicking when this happens. Some debt collectors intentionally harass debtors so that they will admit to their debt and be forced to make a verbal commitment, which they will then hold against you. Once you tell them that you are going to pay your debt, they will carve it on stone and could even use legal measures to extract the cash from you.
At Financial Rescue, a client’s success in a debt settlement program means happiness to us. We love seeing our clients graduate from the program and finally walk free from debt. That is why we take matters seriously and do as much as we can to help them succeed with their own debt settlement program.