Is Debt Settlement The Right Solution For You?
We are here to help you understand debt settlement.
Debt settlement is a process designed to help qualified individuals in a financial hardship pay off their debts in less time than by making the required minimum monthly payments to creditors.
Debt Settlement: The Right Solution for You?
Over the last 50 years, Americans have notched up billions of dollars of debt, and today many are living with the stress of trying to cope with debt that threatens to overwhelm them. According to the Federal Reserve Bank of New York’s Center for Microeconomic Data, by end of September 2017 total American household debt stood at US$12.96 trillion dollars, of which US$3.70 trillion does not relate to housing and home ownership.
The stress involved for so many household heads could be considered a national epidemic. Loans for study, to buy a car, mend a leaky roof, have an operation, afford a holiday, make sure the family has a good Christmas, even to consolidate other debts, all add up to potential heart attacks, strokes and ulcers or worse! Quite literally every area of life can be impacted by the level and scale of debt entered into by individuals struggling to support families, students trying to complete college courses, the many who find themselves temporarily out of work, and even those following a dream of a lifetime only to have that dream turn sour and be left with an outsize debt and an undersized means of tackling it.
Career, relationships, mental and physical health, emotional and psychological balance, and general well-being are skewed and disordered when conducted under the mantle of debt. Every monthly payment can be a new source of worry and if that monthly payment is becoming harder and harder to afford, stretching into the future like a life sentence, then maybe you should consider debt settlement.
Debt settlement may not be for everybody, since there are financial consequences that you should look into, but it is also true that debt settlement has helped many people considerably by steering their move away from the debts that are strangulating them.
Debt resettlement enables an individual with unwanted debt to approach their creditors with a lump sum payment completion offer in exchange for wiping away the remainder of the loan – “debt forgiveness”. It can be a sensible strategy for anyone feeling constrained and stressed with debt that is beginning to overwhelm.
Here’s how debt resettlement works and what the benefits are:
Essentially a Debt Repayment Strategy
Debt settlement is essentially a debt repayment strategy. It works through negotiating a partial payment with your creditors in exchange for their agreement that your debt is over. While this sounds an easy solution, it is a little more complex! However there is evidence to show that in the United States over a third of people entering a debt settlement process have up to 75% of their debt removed within three years and this removes a considerable amount of stress from their lives.
There are two different ways you can negotiate your debt settlement: one large sum or several payments over time. Creditors, generally, are more amenable to agreeing a one lump sum settlement.
It should be noted that certain types of loan are not open to debt settlement: such as unpaid student loans. It is the preserve of unsecured debt where the only alternative is that you can’t pay at all.
There are two ways to approach debt settlement - with the help of professionals or independently:
Working with professionals
The advantages of working with a professional debt settlement company, such as FRLLC, are huge. We have a ready roster of experience, knowledge and skills to use in our clients’ favor. The program has a network of contacts amongst creditors - many likely to be our clients’ creditors, and a good reputation amongst those creditors and are able to negotiate and advocate on our clients’ behalf without the emotional involvement but with the professional distance necessary to get the best possible repayment deals on their behalf. The most common means by which this process works is for the client to voluntarily cease payments to the creditor and make payments direct an escrow account for the purposes of settlements. Once enough funds are established in that account, then the program will negotiate a final payment to the creditor on our clients’ behalf. Our fee will be an agreed percentage of the amount that we agree on your behalf to wipe the debt. Our will always work unceasingly for, and negotiate in the best interests of, all our clients whatever the scale or circumstances of the debt.
Difficulties and disadvantages of doing debt settlement independently
For those who want to tackle debt settlement themselves, there can be many pitfalls to navigate. Approaching creditors and negotiating on behalf of yourself can be daunting, especially when you are feeling vulnerable and fragile. Large amounts of debt and an ability to maintain a calm negotiating head is difficult for most of us. Please read up on the debt settlement process before you take the decision to go it alone.
The Advantage of Debt Settlement
Debt settlement may not be the best option for everyone. If your credit is in good standing, you may want to consider other alternatives first. But debt settlement can be a good choice for many.
Two of the biggest benefits of debt settlement
Debt can be repaid much more quickly
Debts are usually paid off between 2 and 4 years after the start of a debt settlement process. With other loan repayment terms it can take up to 15 years to repay. However, it should be noted that debt settlement will stay on your credit history for 7 years and so for most people, should be a last resort.
Avoidance of bankruptcy
By far, the biggest reason most people choose debt settlement is so they can avoid filing for bankruptcy. Chapter 7 and Chapter 13 bankruptcy will stay on your credit history for 10 and 7 years respectively and can affect your ability to find a job, apply for a loan, and rebuild your credit score. In spite of the term limits, bankruptcy creates a permanent public record. Some applications may even ask if you have EVER filed bankruptcy.
Moving Forward With Debt Settlement
Before you make any decisions about what to do going forward, there are a few things you should consider. First of all, the IRS does consider any type of debt forgiveness as income, so you will may have to pay income taxes on that amount. So for example, if you are given $15,000 in debt relief, you will owe roughly $4,500 come tax season. Best to consult with a tax professional with regard to tax consequences.
Debt settlement will also cause significant damage to your credit history. Because of this, it’s best only to consider it if your credit score is already low due to lack of payments. However, if you decide that debt settlement is the best solution for you going forward, here are a few things to keep in mind:
Financial consequences: worth the effort
Since you will be ceasing payment on your debts, you can expect creditors to send letters and your unpaid history to be recorded on your credit history, which will impact future loans or other financial transactions. However, you can take comfort from the fact that your debt settlement company is using this time to help you save for your final payment and are negotiating strongly on your behalf what that final payment will be.
Do start the process quickly
Don’t wait until months of unpaid installments have accrued. This will only result in an irreversible bad history. The sooner you start debt settlement the sooner your debt problems will be dealt with, and the sooner creditors will understand that despite problems you are not turning your back on what you owe. This will hold you in good stead when you need their favor at a future time.
Financial Rescue is a reputable and experienced financial rescue company which will represent you and advocate at your behalf. We will help you determine the outcome of your settlement in a dedicated, professional and skillful manner. We have long experience in the industry and will not pressurize you to make any immediate decisions. We are best paced to help you in your hour of need.
If a debt has become an unmanageable burden in your life, you don’t have to go through it alone. At FRLLC, we have certified debt relief professionals who can walk you through all of your options to help you decide on the solution that is right for you. Contact us today for a free consultation where we can learn more about your situation. Our debt experts can come up with a solution that is specifically tailored to your individual needs.
The Answer To Your Debt Settlement Concerns
Financial Rescue has the answer to your debt settlement concerns.
Most of our clients pay off their balances within 36 months with one low monthly program payment.
To ask additional questions and to find out if you qualify, contact us today.
Disclaimer: Some programs and services may not be available in all 50 U.S. States. The information provided is for informational purposes only. No communication should be considered legal advice. Individual results may vary based on program terms, ability to save sufficient funds, underwriting guidelines, the creditors in your individual profile, and the willingness of creditors to negotiate. Individuals depicted in images and videos may or may not be employees, and some are actors or models, all of whom do not necessarily endorse or support Financial Rescue, LLC. Financial Rescue, LLC, does not assume any debt, make monthly payments to creditors or provide tax, bankruptcy, or legal advice.