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Starting a Debt Settlement Plan

Starting a Debt Settlement Plan

In an ideal world every credit card holder consistently makes their monthly payment on time, and has a constant zero balance. The facts of the matter are that we do not live in a perfect world, and consumer debt amounts are at an all-time high. The problem that millions of Americans are facing is: Unsecured Debt. When you have reached a boiling point in which your options are running low, there is an extremely viable solution: entering into a debt settlement program. This is by far the greatest alternative to bankruptcy that consumers can take advantage of. The side effects of alternative choices can be much more detrimental to your personal credit and mental health. When facing an insurmountable amount of unsecured debt, starting a debt settlement plan is the most logical resolution.

The process of debt settlement is fairly simple, but it does require a serious commitment for success. You must stick to your plan, and if you do, the results will seem unreal. The amount of money you can save is tremendous. Additionally, the percent of debt your creditors will accept will be shocking as well. This option might seem too good to be true, but the proof is with the millions of Americans settling their debt yearly. When dealing with these large creditors you are just a number to them, although they do expect to get reimbursed, regardless of how fair they treat you. With a team of professionals working on your behalf, you are putting yourself in a position to get the best results. That is exactly what debt settlement can do for you, yield positive results.

The debt settlement process does take time, but it all based on a term you are comfortable with. To actively participate in the debt settlement process you must make the heartfelt decision to stop paying your creditors. There needs to be some level of delinquency for the process to be effective; this gives you creditors the incentive to negotiate. The most negative byproduct of entering into a debt settlement plan is the impact to your credit score. Commonly, by the time you need to work with a debt settlement program, your credit will have already taken a plunge. On the bright side of the equation, when you graduate the program completely debt free, your credit score will automatically rise. Upon completion of the program the former debts on your credit report will read “Paid as Agreed”, the report will not reflect going through any third party company. Furthermore, when the debt settlement process is complete, consumers should be advised to take advantage of credit repair companies.

During the inception of the debt settlement process you will have to create your own personal trust account. This account must be with another banking institution that is separate from any creditors that you are in debt with. The reason for the separate account is to prevent cross collateralization. Within the trust account your funds will be built so that a professional legal negotiator will use to leverage your creditors. Once every month or even bi-weekly you will make a payment into your trust account, the payment will not go to the debt settlement company, but rather into the account that you are in full control of. Once 20% of your lowest debt is accumulated within your trust account, the negotiations will begin.

The beauty of debt settlement is that there is no limit to the dollar amount of your debt to join the program. As long as it is unsecured debt, not tied to any collateral, it qualifies. The major types of debt accepted into the program are: major credit cards, loans, and personal lines of credit. Accordingly, credit cards issued by store chains are also accepted, for example: Walmart, Sears, Best Buy; even a furniture store debt will qualify. The kind of secured debt that does not apply is attached to collateral, such as: home mortgages, auto loans, and student loans. Once enrolled, the debts will be settled from the bottom to the top, meaning the lowest debt will be taken care of first, followed by the second lowest, and so on until the highest debt amount is settled and paid.

The flexibility of a debt settlement program is another great advantage. If an unforeseen circumstance arises, and you cannot make the monthly payment, or can make a partial payment, that can be arranged. Keep in mind, the debt settlement law firm is not a creditor, they are a debt solution. Any delay of payment into the program will only directly affect the client, and slow down the process of debt settlement. Although it is still great that you will have client service representatives working on your behalf to walk you through the process, step by step. From a month to month basis you can make changes to fit your budget and you will not be penalized, as long as you give the firm between five to seven business days’ notice to adjust the payment plan.

With all of the work the debt settlement law firm is doing for you, there are some fees involved. There are, however, no upfront fees in the process, which would be unconstitutional. After the first half of your term all of your monthly payment goes directly into your trust account, minus the bank fees. Debt Settlement is not a process that will work immediately, it takes time to save up and eliminate your debt. On the consumer side, it does take some self-control and patience, but your end result will leave you with a clean slate, and open a new chapter in your life. The debt settlement company cannot guarantee you will not receive creditor calls, and if the debt amount is high enough, creditors will still pursue what they are owed in a court of law. If you look deeper into the concept, and investigate some real life testimonials of consumers, you will be enlightened by the positive results. If you are facing a bankruptcy or you are just plain tired of dealing with having an outstanding debt with your creditors, enrolling into a debt settlement plan is your most logical solution. Find out more about how to begin a debt settlement program by filling out the form to the right.

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