Given the right circumstances, a Debt Settlement Program is an option that can give you freedom from debt!
Here's how a debt settlement program works:
Let's face it, credit and credit cards are something most people deal with every day.
You know how that can go....
You get an offer for a credit card with 0% and fees (for 6 to 12 months at least). All you have to do is fill out the form and submit.
At first, you use the card to buy some items that may be just a little bit too expensive for you you right now, but, with a minimum payment of only $50 or so,why not?
But, you get another offer (or two, or three, or four...) and you figure:
"I can afford a $200 or so each month...Why not?"
I actually took this picture...kinda says it all:
Sure, you can afford the total minimum payments due each month of about $200.
But what happens if one of the following happens (as has done with most of my clients):
- Loss of Employment
- Divorce
- Major injury or illness
- Total Disability
- Death of Spouse or Partner
- Too little fixed income after retirement!
Just to name a few!
Pretty soon, you just can't keep up with all the payments due (beside the mortgage or rent, utilities, groceries, etc.)
NOW WHAT DO YOU DO?
When your cannot keep up with the minimum payments, it doesn't take long to realize that you are in trouble!!!
A lot of people start taking cash advances from one card to make the payments on the others. This is just putting off the inevitable!
You may be able to take out a second mortgage, but this has dangers as well. Be very careful here!
Please don't be fooled into getting one of the "PayDay Loans"!
These "lender traps" may end up costing you very high interest rates (I've seen them as high as 85%), making it almost impossible to ever repay!
A Debt Settlement Program may be the answer.
Here's the basics:
If you haven't stopped making of payments to your creditors, rather than continue this process, you will start making a payment (really a deposit) to an account set up for you at an FDIC bank.
Two things will happen:
- Your account will start to grow, which will allow for negotiations (more later).
- The creditors and debt collectors will be calling and sending letters.
Yes, your "original" creditor (Visa, Citibank, Home Depot,etc.) can legally call you about your account. You gave permission (all the fine print) when you signed up.
But, once your accounts are transferred to a debt collector (usually 3-4 months), you can put a stop to the calls. This will help:
You will also be getting letters from your creditors or debt collectors.
They may offer some kind of "hardship plan" to help you get caught up, but most of these are just a trick to get you to keep paying, and paying, and paying!
Debt Collection companies (and sometimes the original creditor) are usually willing to accept a SETTLEMENT for less than the balance due.
Why would they do that?
The original creditor may just want to clear up old debts and charge off your account as a loss to their over-all profit/loss for tax purposes.
They have figured in how much "loss or breakage" they can accept and still be profitable!
They may have ASSIGNED your account to a debt collector who will get paid a percentage from what they are able to collect from you.
The original creditor may also charge off your account and SELL the account to a debt collector who is also a DEBT BUYER.
There are millions (possibly Billions) of dollars of "debt" bought and sold for literally "pennies-on-the-dollar".
Whether you account was assigned or sold to a debt collector, you can see that they may be open to a settlement.
Example:
You have a Citibank Card with a balance of $10,000.
It was sold to XYZ Debt Collection Services for $500...that's right..."pennies-the-dollar"!
Do you think they might be open to a settlement of say...$3,000 - $5,000?
Sure, check this out:
As time goes by, one-by-one, your accounts are settled and your Credit Report shows a $0 balance!
Does this happen over-night?
Of course not! Depending on how much debt you have and your particular financial situation, a Debt Settlement Program may take 4 or 5 years to help you finally become...
DEBT FREE!
But, doesn't that sound great?
A Debt Settlement Program is not the answer for everyone, but may be just what you need! It's easy to find out:
