Not everyone who starts out on the debt settlement path make it to the end. Sometimes, people choose another option because they weren’t ready for the debt settlement process. If you’re strongly considering debt settlement, here are some tips to make your settlement successful, even if you’re not doing it yourself.
Understand the process. Many people who complain about debt settlement companies simply don’t understand how the debt settlement process works. They’re surprised to have been making payments for several months and haven’t yet seen results. Debt settlement results typically don’t happen for several months because you first have to save up enough money to settle an account. This is true whether you hire a debt settlement company or you do it yourself. Debt settlement companies are generally required to let you know how soon you can expect results. That could take much of the guesswork out of the equation.
Pick the right company. Since the government made stricter rules for for-profit debt settlement companies, many of them have gone out of business. The good news is that the companies left in the industry are likely to follow the law. Still, you should pick a debt settlement company like you would shop around for car insurance or any other service. Check the company’s reputation and ask about their track record.
Pay as much as you can. The speed of your settlements depends on how fast you can come up with the money for your settlement. The more you can put toward your monthly debt settlement payments, the sooner you can likely settle your debts. Push yourself to cut out extra expenses and make a payment that’s perhaps a little uncomfortable. It usually takes big sacrifice to pay off your debts in a shorter amount of time, but you’ll probably be happy with the results when it’s over.
Keep realistic expectations. Some of the most-repeated debt settlement success stories are from people who’ve settled their debts for low percentages and in record amount of time. Often these cases are the exception and not the norm. Companies more commonly settle accounts for 30% to 70%. If you reject their settlement offer because you’re holding out for something better, you might miss the opportunity to settle all together. Sometimes you have to take what you can get.
Explore your other options first. You’ll likely eliminate doubts about debt settlement if you’re sure that it’s the best thing for you. So, before you decide to go through with settlement, take a close look at other debt relief options to be sure you’re making the right decision. Credit counseling, debt consolidation, bankruptcy, even paying your debt on your own are all alternatives that may or may not work for you. You may want to rule them out so you won’t have any regret.
Based on changes to federal law, you can get a refund of the money you’ve paid toward your settlement if you later decide that debt settlement isn’t right for you (as long as the money hasn’t already been paid toward a settlement). However, keep in mind that any settlements made at the time you cancel have already been added to your credit report.