Being in debt can feel like a hopeless endeavor. With bills piling up and your salary getting lower, attempting to get rid of debt is a process that can often take years of stress. A debt settlement program will assist you with your debt payment needs. With help from the right team of professionals, a debt settlement program may negotiate with those you are in debt with to get you back on track. Much like many other things in life, a few benefits and risks come with a debt settlement program. Let’s have a closer look at these benefits and risks, as well as what they do for you.
4 Benefits of Debt Settlement
There are four main benefits that one will notice when undergoing a debt settlement. These are important to take note of because they can assist you in achieving the financial freedom that you deserve. Let’s closely discuss these benefits and how they can help you.
Alleviates Debt Faster
As mentioned before, debt obligations can pile up quickly and take years to pay off. The major benefit of a debt settlement program is that it assists you in paying off your debt obligations faster. This is done through a negotiation process. Credit card companies and other forms of lenders would often prefer a smaller payment amount than no payment at all. Partnering with the right debt settlement company grants you access to industry professionals that know just how to negotiate with these entities.
When this process is successful, it puts you on the right track toward paying off your debt in a shorter period of time. The average amount of time that it often takes for this process to complete is around two to three years. This timeframe can also be longer depending on your debt repayment amount, monthly repayment plan, timely payments, and financial position. Although it does take a few years to alleviate the debt, this process still gives you the opportunity of paying it back faster.
Helps You Avoid Bankruptcy
Personal bankruptcy is a long and draining process. When you file for bankruptcy, it follows you around for 10 whole years. That is a long time. This process may also have other negative consequences further down the line. When applying for jobs, loans, and other necessities, these institutions may ask if you had filed for bankruptcy in the past. You legally have to honestly state whether you have or have not filed for bankruptcy in the past or you could be charged with fraud.
Although the bankruptcy process is there to assist, it comes with a large range of drawbacks that is best to avoid. Bankruptcy should be used as a final solution and only when there is nothing else that you can do. Before deciding on doing so, it is also best to consult with a debt expert and debt settlement company to assess whether there are other avenues that you can approach.
One Monthly Payment
Making multiple payments to different accounts and bills can be quite a headache. The debt settlement process assists in creating a single payment that you can make monthly. This lowers the chances of missing a payment or payment date and lowers your total stress toward the debt settlement.
Grants You Positive Financial Freedom
Financial freedom is essential. When crippling debt repayment and bills begin to stack up, things can often feel hopeless. Getting rid of your debt balance grants you the financial freedom that you need to plan for the future. This means that you can start to save, invest, and enjoy the simple things in life such as going out and living a life with less stress. The settlement process is there to assist you in achieving your financial dreams for the future.
3 Risks of Debt Settlement
As we can see, there are many benefits that come with a debt settlement. While there are many benefits, it is important to also understand and take the possible risks that it may pose into consideration. Let’s have a closer look at these risks and how they may affect you.
Could Affect Your Credit Score
When you start the process of your debt settlement, your credit score may take a dip. This is because the settlement team needs a sufficient amount of money to negotiate which that is often placed into a special savings account. This may mean that debts and other payments may need to be placed on hold until the process can properly begin. Although your credit score may take a dip in the present, it is still beneficial to go about it. The aim of this process is to financially free you in the long run.
Debt Settlement Companies Will Charge You A Fee After Your Debt Has Been Settled
Debt settlement companies are still businesses and also need to make a living. The settlement company will not charge you an upfront fee for their service but will charge you once the unpaid debt has been paid off. It is essential to always enquire about this fee with the chosen service provider to ensure that you are receiving realistic and competitive rates.
Credit Card Companies Do Not Have To Agree
Credit card companies do not have to agree to the terms within the settlement agreement and repayment plan. When this process is done alone, there is a higher risk that the companies may decline the negotiations and seek further action. A settlement company is specially trained and has experience in negotiating effectively with these companies to ensure that you receive the best possible solution to your financial debts. These credit card companies will often prefer that small payments are made rather than no payment at all.
Getting The Right Assistance To Settle Your Debt
Having access to a team of professional negotiators and debt alleviation experts is an essential tool in settling outstanding debts. When things may seem hopeless, there are always people that can assist you in getting on the right path. Alleviate Financial is an industry expert in assisting individuals with their debt management plans and settlements. With years of experience, the team is able to effectively negotiate with your credit card debts, personal loans, medical debt, and other types of debt that you may be in to plot a course for financial freedom. Get in contact with Alleviate Financial and start your journey toward a future that is free from stress and unsecured debt.