Debt settlement. So much is said about this process but, is it really possible to reach national debt relief through debt settlement? In this blog post, we’ll dive into the world of debt settlement. We’ll explore the feasibility, benefits, and considerations of seeking debt relief through this method and see if it’s the right option for you and your debt.
What is Debt Settlement?
Let’s break it down and make it loud and clear. Debt Settlement isn’t a scam or something that will leave you broke and with no way out. Debt settlement is real and can help you be debt-free at last. How does this happen?
Basically, debt settlement means that your principal balance of debt is negotiated down to a lesser amount. Settlement can be one of the most attractive options available to you if you have more debt than you can pay off in a 2 – 3 year time frame, or if you are unable to make the minimum monthly payments due to financial hardship.
With a debt settlement program, they will negotiate on your behalf in order to lower your principal balance and in most cases, you will be able to lower your monthly payments. But, is it truly realistic to think that you’ll be able to pay less than what you owe right now?
It’s natural to feel skeptical about the idea of paying less than what you owe to creditors. You’ve probably come across ads for debt settlement and wondered if they’re too good to be true. The truth is, debt settlement is a legitimate option for those facing financial hardship.
If you’re unable to meet your monthly payments due to genuine financial struggles, creditors are often open to negotiation. They may agree to accept a lower principal balance rather than receiving nothing at all. For many Americans grappling with debt, paying less than the full amount owed is a real solution to their financial challenges.
When it comes to credit card debt, there are actually 3 different types of settlement a debt company can work out with your card issuer. Of course, the best one for you depends on your current financial situation. Let’s take a look at your options.
Lump-Sum Settlement
In a lump-sum settlement, you propose to settle your entire debt with one substantial payment, typically for less than what you owe. For instance, if your credit card debt totals $4,000, you might suggest paying $2,500 to clear the balance, based on your original credit limit. If the credit card company agrees, they’ll forgive the remaining amount you owe.
Workout Agreement
In a workout agreement, your credit card issuer works with you to ease the burden of your debt. This might involve reducing your interest rate or even temporarily waiving interest charges. The bank may also take steps to help you manage your debt better, such as lowering your minimum payment or forgiving past late fees on your account. It’s a positive step towards regaining control of your finances and staying on track with your payments.
Hardship Agreement
A hardship agreement, also known as a forbearance program, can be a lifeline during temporary financial setbacks like job loss or unexpected illness. If you find yourself in such a situation, reaching out to your card issuer can open the door to relief.
With a hardship plan, your card issuer may offer various forms of assistance. This could include lowering your interest rate, waiving late fees, or reducing your minimum payment for a limited time. In some cases, you might even have the option to skip a few payments as you work to recover financially. It’s a supportive option that can help you navigate challenging times with greater ease.
Like we mentioned before, the decision is up to you and you get to choose which agreement fits best your debt situation. But, let’s concentrate more on the “lump-sum settlement” in this blog post. Want a closer look at this debt settlement process? Check it out:
- After enrolling in a debt settlement program, the company or firm will take on the burden of dealing with harassing creditors and serve on your behalf to negotiate the lowest possible payoff amount to the creditor.
- Then you get asked to pick out a customized program that fits your needs and that will ultimately set you on a path to lower monthly payments.
- Last but certainly not least, you’ll be on your way to becoming debt free in as little as 12-36 months!
When you work with a reputable company or law firm, like Mediator Law Group, you can expect debt relief through debt settlement. But is it really necessary to contact a company? Can’t you do it on your own?
DIY Debt Settlement: Is It Possible?
The simple answer is yes. Yes you can go through the debt settlement process on your own. You can call your own creditors and ask them to lower your debt and offer to pay them a lump sum, something way smaller than what you really owe. So basically, settling your own debt is possible. Now, here comes the “but” part.
You can settle your debt on your own but it could be problematic without representation of a company or law firm with experience dealing with creditors who could put obstacles in your way. Here are some of the benefits of using a company or law firm to help you settle your debt:
- Experience dealing with these issues. With a law firm you receive full legal representation of the law firm throughout the entire process.
- Avoid paying a high lump sum that creditors will often require when you settle on your own.
- Full protection from your debt settlement company or law firm in the event creditors decide to sue you.
- More time to save money in a special purpose account (SPAA) during the settlement process.
As you see, DIYing the debt settlement process is possible, but in reality it’s not in your best interest to do it by yourself. Trust a reliable company like Mediator Law Group instead!
Trust MLG For National Debt Relief Through Debt Settlement
Trust Mediator Law Group for national debt relief through debt settlement. Our team of expert analysts is highly trained to assess your unique financial situation and find the best option for you. We understand that each client is different, and we are committed to providing a customized program tailored to your needs.
At Mediator, we have dedicated negotiators who fight tirelessly on your behalf. Our mission reflects our commitment to excellence and integrity in serving our clients. With extensive experience in debt resolution, we work directly with creditors to negotiate settlements that significantly reduce your debt burden. Rest assured, we accept nothing but the best settlements and advocate for you throughout the entire process. Thinking of debt relief? Think of Mediator Law Group to guide you toward financial freedom!
