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5 Ways to be Successful in Your Debt Settlement Program
Did you recently enroll in a debt settlement program? Congratulations! You’ve taken the first step toward resolving your debt and getting your life back.
A debt settlement company can help you receive total or partial forgiveness of your debt, usually within 24-36 months. But your debt settlement company is going to need your full cooperation to make this transition as seamless as possible and to achieve the best possible results.
So rather than expecting your debt settlement company to take care of everything for you, you should view this as a partnership. To help you get a better understanding of what is needed on your end, let’s break this partnership down into actionable steps.
Like any other matter involving your finances, a debt settlement program requires a lot of effort on your part. It’s not enough to just fill out the debt settlement application and then pay no attention to the terms and conditions. You need to make sure you fully understand what you are getting yourself into.
Often, people enter into debt settlement with preconceived ideas about what the process will be like. So they don’t ask any questions and then they become confused and angry when the actual process doesn’t live up to their expectations. This can lead to poor communication between you and your debt negotiators and can slow the entire debt settlement process down.
And once you know what you are getting into, it’s important to remain an active and engaged participant. This will help the process go more smoothly and — most importantly — get your outstanding debts resolved as quickly as possible.
Your debt negotiator must be able to reach you at any time in the event that something pops up and they need information only you can provide.
Likewise, your debt negotiator could receive news of a possible settlement and they will need to consent to sign off on a creditor’s offer. Debt settlement offers are time-sensitive so you need to be available in order to avoid missing out on a good offer.
If your information changes during the debt settlement process, make sure you give the new information to your debt settlement company right away.
Nobody enters into debt settlement because their finances are in great shape. But unfortunately, people are often embarrassed by the financial position they are in and as a result, have a hard time being upfront about certain details.
But by withholding or misrepresenting important financial information during the pre-qualification stage you may wind up in a debt settlement plan that is not suited to your needs. Likely, one of the following two scenarios would occur:
The plan is too easy on your debt
The plan is too hard on your budget
If it’s the first scenario, then you won’t be able to pay your debt down as quickly as possible. Whereas the second scenario would cause too much of a financial burden and you may just quit altogether. Either way, your plan won’t address the root problem: resolving your debt.
It is always our goal to provide a customized plan to fit our clients and their budget. So be honest and provide accurate, relevant financial data.
If you think the proposed payments are too steep and you won’t be able to afford them, speak up. That’s your best chance for getting the plan that’s right for you.
In order to settle your debts as quickly as possible, you should choose the most aggressive plan your budget will allow for.
What do we mean by “aggressive?” This means putting everything you are able to toward your savings account. So if you receive extra money from a side job or bonus, deposit it into your trust or escrow account.
Doing so will help you save more quickly, which means your debt negotiators can begin the negotiation process with your creditors as soon as possible.
The reason this is important is that having a lump sum of cash in your savings account is an advantage during the negotiations process. Your creditors will prefer a lump sum payment rather than staggered payments so if you have a large cash reserve, negotiators can use it as leverage to get you the best deal possible.
And once a settlement has been negotiated and a debt settlement letter has been signed, the repayment period begins. If you agreed to staggered payments, try to avoid adjusting or missing payments altogether. Otherwise, your creditor may withdraw the settlement offer altogether and you’ll be stuck with the original debt.
Once you enroll in a debt settlement program, most creditors will begin to pursue aggressive tactics to collect the money you owe them. Your creditors may threaten you, intentionally harass you, and they may pursue legal measures to collect the money. This can feel very overwhelming but it’s important that you stay grounded and don’t panic when this happens.
Hopefully, these tips have helped give you a glimpse at what the debt settlement process is like and have shown you the steps you can take to be successful.
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