Economic times are tight and debt is a concern for virtually everyone. Whether you fall a little behind due to job-related issues or are hit by an emergency expense, having debt can be a crippling experience. Many try to tackle the issue on their own because they are either too embarrassed or not knowledgeable enough to take advantage of different options.
Fortunately, there is an option for many people to use: debt settlement companies. If you’re wondering how debt settlement companies can help you, here are five points to consider when deciding whether a debt settlement company may be right for your financial situation.
Eliminate Your Debt
Many people have a lot of money going through their accounts at any given time. Typical spending includes a mortgage, car payment, utilities, groceries, and credit card payments, in addition to money spent on entertainment and miscellaneous purchases. Add in student loans or medical bills and suddenly there are a lot of due dates to keep track of. Trying to remember all of the payments you have to make is one of the leading causes of debt. If you miss a payment by just a couple of days you may get hit by heavy penalty fees and your interest rates could skyrocket.
One of the greatest benefits of utilizing a debt settlement company is that it allows you to effortlessly eliminate your debt. By allowing the company to negotiate with creditors on your behalf, you can settle for a smaller amount that is easier to pay off and keep track of.
Negotiating Better Interest Rates
Unsecured debt from credit cards and personal loans carry interest rates. Some of these rates are incredibly high, but because they only come into effect if you don’t make your monthly payments in full, they add a percentage to your overall balance each month that you might not notice. If you are only paying the minimum each month, then high interest or compounded interest might ultimately force you to pay as much as twice what you originally owed.
Since debt settlement companies hire financial experts who maintain professional connections within the industry—including creditors and collection agencies—they understand the intricacies of interest rates far better than the average consumer. As a result, they are able to negotiate with creditors to come up with more reasonable interest rates on your debt. This helps cut down on the final amount you will have to pay, even if your monthly payments are relatively small.
End Creditor Harassment
Struggling to stay on top of your bills can be stressful. Nothing adds to the stress more than harassing calls from creditors demanding payments. This is often cited as one of the worst parts of debt and can compound the issues felt by people in a financial hardship.
A debt settlement company can help end this harassment by dealing with creditors on your behalf. Avoiding the constant calls of debt collectors will help you return to some semblance of a normal life, ultimately allowing you to earn more money that can be used to pay off debt.
Rebuild Your Credit Score
Not every consumer is knowledgeable about their personal credit score and how important it is to maintain it. Having a great credit score will help you get larger loans, raise your credit limits, and get you better interest rates on credit cards and personal lines of credit. Keeping your credit score high is not very difficult, but constantly missing payments or having too much debt on your record can cause your score to plummet.
Eliminating your debt with the help of a settlement company actually looks good on credit reporting and improves your score. By having a single source of debt, you can meet payments and show creditors that you are willing to stay on top of your debt.
Avoid a Costly Bankruptcy
The biggest fear that people have while struggling to pay their debts is filing for bankruptcy. While bankruptcy can technically rid you of debt, it can also cost you a huge chunk of your credit score for up to 10 years. Even worse, assets like your car or home may be seized as part of a bankruptcy settlement. With a debt settlement program, you can restore your credit quickly and make it easy to save money to pay off your debts.
Through the aid of a debt settlement company, you can avoid the worry of a devastating bankruptcy. The company will work with your creditors to keep you financially afloat and handle your debt in a professionally responsible manner. Debt settlement also stays on your credit record for seven years without any public record, as opposed to bankruptcy.
Once you pay off your debt through the settlement company, you can focus on moving on with your life with new financial freedom. Explore your debt settlement options today!
Carolyn Clarke is a financial advisor and freelance lifestyle writer from Seattle, WA. With her experience in financial consulting, she has helped many clients overcome their debt, increase their credit score, and attain financial freedom. When she is not busy with work, she enjoys hiking in the forest with her dog, Catfish.