|
By Angie Devlin
Today’s
consumer has more buying power than ever before. There are
offers everywhere:
Many consumers swimming along happily in a sea of
credit suddenly find themselves drowning in a quagmire of debt. According
to a 1992 Federal Reserve study, 43 percent of U.S. families spend more than
they earn and, according to Cardweb.com, almost one out of every 100
American households will file for bankruptcy during their lifetime.
What should you do if you are one of these consumers?
You could take advantage of one of the many services available to you, such
as debt settlement programs. You can have your financial freedom back again.
What Are Debt Settlement Programs?
For years, debt settlement has been a popular method
for thousands of consumers to regain financial wellness. Debt settlement
means that, with the help of a settlement negotiator, you work out an
agreement with creditors to settle your delinquent payments or unpaid
balances.
If you are behind on payments on a high interest loan,
for example, it could take you as long as 20 years to pay your debt. Debt
settlement programs can help shrink your payment terms and amounts, and they
can also provide you with the following benefits:
A Current Credit Report
When you sign up for, and begin, a debt settlement
program, many creditors will “re-age” your account, or bring it to a current
status.
Lowered Interest and Monthly Payments
Depending on your debt settlement program, your
settlement negotiator can help reduce the interest payments and monthly
payments on your outstanding loans.
A Reduction in Creditor Calls
Creditors call consumers regularly if they are behind
on their payments or not making payments at all. Negotiators can work with
creditors to eliminate this practice once you are enrolled in a program.
In addition to these benefits, debt settlement programs
can also assign you a credit counselor. Besides playing an active role in
your settlement, these counselors can also provide you with financial tools
to teach you how to maintain a healthy spending practice.
What Types Of Debt Are Eligible?
While debt settlements can be performed on almost every
type of debt, most settlement cases involve revolving credit, or credit
cards. Why? It’s because credit card debt is one of the easiest and
fastest types of debt to acquire. According to the Federal Reserve,
Americans made $1.1 trillion worth of credit card purchases in 1999. In
addition, consumers in the U.S. carry on average $5,800 in credit card debt
from month to month. Based on this information, the Federal Reserve reports
that if only the minimum monthly payment was made on this debt, it would
take more than 30 years to pay it off. This debt would also include an
additional $15,000 in interest.
However, remember that debt settlement programs are not
just limited to credit cards. There are many debt settlement programs
available that can address your wide-ranging needs.
Are Debt Settlement Programs Right For You?
Debt settlement programs can be ideal for people with a
good credit history who have been making consistent payments, no matter how
small, on their debts. If, however, your credit history shows that you are
behind on your credit payments, or that you have significant “charge-offs”
noted on your account history, you might not be able to participate in a
debt settlement program.
Unfortunately, many people don’t think about healing
their debt problems until they decide to make a big purchase, like buy a new
home. Being proactive with your financial situation in advance and seeking
advice from a credit counselor can help you get back on the financial
well-being track before it’s too late.
Here are a few tips to keep in mind as you enroll in
your debt settlement program:
Outcomes Are Different For Everyone
Not everyone has the same experience in a debt
settlement program. For example, some people are fortunate to have their
debt reduced down to 75 percent of their original payment, while others may
only experience a 50 percent reduction.
Seek Negotiating Advice from a Debt Settlement Firm
If haggling and hardball negotiation is not your
thing, there are several debt settlement firms that can provide you with
settlement expertise.
Be Patient
Even though debt settlement programs can put you on the
fast track to debt freedom, in some cases, paying off creditors can still
take up anywhere from two to four years.
Look forward to the future
Stay focused and remember that the right debt
settlement plan can lift you out of the quagmire and have you plain sailing
again in no time!
About The Author
An independent public relations
consultant, Angie Devlin provides comprehensive communications and promotion
services to companies in the high-tech, education, and retail industries.
With over 10 years of experience, she has held a variety of media relations
and marketing positions for companies such as Sun Microsystems and
Hewlett-Packard. Angie holds a B.A. degree in Technical Journalism and
Public Relations from Colorado State University and is based in Westminster,
Colorado.
Sources
- The
Federal Reserve. http://www.newstepsolutions.com/debt-statistics.htm
-
Cardweb.com. http://www.newstepsolutions.com/debt-statistics.htm
Copyright © 2004 QuinStreet Publishing LLC.
All rights reserved. |
