How to Settle Debt For Less Than You Owe

Debt Relief

When was the last time that you were able to settle debt for less than you owe? You probably don’t even know how many debt relief companies there are in Arizona and how many ways there are to get out of debt. But debt settlement is one of the fastest growing debt relief strategies in the state. There are other debt relief strategies as well that do much better than debt settlement, but the debt relief company Gilbert is well-known for helping consumers resolve their debt problems.

A Debt Settlement Strategy. Interestingly, consumers who sign up for a debt settlement plan believing that they can manage their debt alone, often have much less negotiating power than people who have yet to make any payments, minimal monthly payments, or even minimal payments at all. Consumers are more likely to feel comfortable settling their debt when they know that the company has a history of successfully reaching agreements and has a good reputation. That’s why the debt settlement industry is so crowded, with many companies trying to maximize their revenue at the consumer’s expense. Don’t let frustration cause you to sign a contract for a debt settlement service that will hurt your credit more later.

Ask Questions. Before signing anything, find out everything you can about the debt collection agency that you are thinking of hiring. How long have they been in business? Have there been any complaints filed against them with the Better Business Bureau? What’s their success rate like? You may need to hire an attorney to read and understand the fine print before agreeing to a settlement; some contracts are voidable if certain things aren’t met.

Know What Your Debts Are For. In most cases, creditors are legally allowed to collect debts from customers in several ways. The original loan is a lien, which means the company is able to auction off property owned by the debtor to satisfy the debt. Another way is to issue a series of monthly payments to cover costs and then wait and see if the customer manages to pay the bill before repaying the debts. If the creditor does go after a customer’s assets, the courts allow the company to proceed with liquidation; however, if you hire an expert debt relief company to handle everything for you, this process is much easier to handle.

Find Out About “Payment Agreements.” If you choose to work with a debt settlement company, it’s a good idea to know what type of agreement the company is going to present to your creditor. There are many different types of arrangements, but most settle for less than you actually owe, allowing you to pay a lump sum at the beginning of the payment period and then make regular monthly payments until the debt is satisfied. By knowing ahead of time what kind of arrangement you’re going to go with, you can avoid any surprises later on.

Find Out If You Can Eliminate Collection Calls. If your debt is much more than you owe, you may find that collection calls become an everyday routine. Your creditor will often send these collection companies in to talk to you, even threatening legal action if you do not pay. This can be very frustrating, and the company must tell you upfront that they will not be holding any court proceedings or taking any other action against you. If a company makes this kind of promise, you can be sure that it is working for them, and therefore you should consider working with them.

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