Debt settlement offers consumers a chance to quickly consolidate all their unsecured debt into a single easy monthly payment and to negotiate your debt for far less than you actually owe. But with each option, there are pitfalls and disadvantages, and not every debt settlement company is legitimate. Here’s what you need to know to avoid becoming a victim of shady debt settlement practices.
Legitimate debt settlement programs require that the consumer agree to certain terms, such as paying down a percentage of the debt. Other companies may require that you stop making payments altogether or get credit counseling to manage your debt. But most legitimate debt relief companies will work with you to help you manage your debt, negotiate a repayment plan, and get out of debt quickly. These programs can also provide debt relief by reducing or completely eliminating interest and other charges on the debt.
When you’re shopping around for debt settlement services in New Mexico, don’t be afraid to ask debt specialists for their opinion. There’s nothing wrong with asking an expert for their take on whether debt settlement is the right method of debt relief for you. Just because a company refers you to a debt settlement doesn’t mean that it’s an expert in the field. In fact, many debt specialists have worked in the debt industry for years and have developed skills that allow them to help people negotiate debt without violating any laws or regulations. They typically work with debt settlement on a contingency basis, which means that you pay nothing until your debt is paid off completely.
Before hiring New Mexico debt relief company, make sure that they are accredited with the Better Business Bureau and are members of the Association of Settlement Companies. This will ensure that they operate within the confines of the law and won’t pursue any unethical business practices. Once you’ve found a few debt relief companies to interview, be upfront about how much debt you have and what your financial situation is. Debt specialists won’t deal with clients who are deliberately trying to reduce their debt and who own assets – such as money – that could be at risk if they go ahead and negotiate debt.
When debt settlement is pursued, debt relief expert will evaluate the debt you have and recommend the best option for you. They will probably contact creditors and work out payment plans with them, which may include lowering the interest rate and eliminating any late fees. Your unsecured debt will then be brought under control, and you’ll be left with one monthly payment – usually a lower one – that will be easily managed.
Debt settlement is an excellent method of debt relief. It offers consumers the opportunity to quickly eliminate debt and gain control over their financial lives once again. When debtors are confronted with mounting debt and fail to seek professional assistance, they are often taken advantage of by creditors who pass the buck and fail to negotiate lower rates and better terms. Instead, they opt for bankruptcy, which not only destroys a credit score but can put you in a position that’s even worse than your current debt situation. By working with debt specialists, debtors can get the help they need and stop the process when they’re ready.