If you are in debt and there is no way out for you to pay the financial burden, then there is only one option left for you and that is Debt Settlement. Many times due to certain conditions in life it becomes impossible for people to mange their finances properly. In this a debt settlement plan would be able give some hope for the person under the debt burden.
Debt Settlement Plan
The Company you select to select your debts or to negotiate on your behalf with the creditors offer debt settlement plan. There are many plans for debt settlement; it can take 6-8 moths or even year to settle the debt. If you are being promised to completely be absolved of your debt, then you are being shown false picture. It is not possible to completely being absolved of debt. You have to pay something.
The plan offered by the debt settlement companies can be expensive as well. The fee paid to the companies is not the percentage of amount to be paid to the creditors, but the percentage of the total amount that is due. There is a lot of money involved and a lot of charges will be paid by the company for getting the debt settled.
Many times the creditors do not want to deal with debt settlement companies. So when you are selecting debt Settlement Company you have to be very cautious and weigh all the pros and cons before deciding any company.
Consolidating funds for settling debts
Another way of going in for debt settlement is consolidating the fund. This can be dome though many ways like hiring company, financial institution or bank for consolidation of funds. This company or financial institution can forward a equity loan and through this loan you can make your debt settlement.
You can also take a loan from your retirement fund, life insurance policy so that the debt could be settled and then try to make proper financial decisions so that payment can be made at proper time.
Credit card companies are also offering a solution to this problem. The companies are offering discount in interest rates for balance transfers. In this the balance amount is transferred to a low interest rate account and would save money. However, before taking this plan it is best to read the fine print so that you are not cheated in this. There are certain conditions that are very rigid and if you don’t follow then you would be in greater trouble.
Self-help for settling debts
If you are daring enough, then you can tackle this problem by yourself. You can talk directly to the creditor and try to bargain for a lower interest rate on the credit taken. You ca also ask for smaller installment that can be managed by you, even though in the long term the payment time will increase.
If you have some amount that you can spare you would like to pay off the loan – this would amount to making lesser payment. Keep your credit report handy at the time of bargaining. If you have a clean and proper credit score the creditor would be more willing to provide you concision. Follow a sensible plan that is suitable to you and you will reduce your financial burden without any problem.