Assess Your Financial Situation
DIY Debt settlement can be an attractive debt-relief option that reduces the total amount you owe. Creditors may agree to settle unsecured debt consolidation at a far reduced dollar amount than initially agreed, making this an appealing solution for consumers struggling to make monthly payments on time.
Assessing your financial situation thoroughly is the first step to effectively managing debt and establishing a plan to pay it off. Take time to list out all outstanding debts with their respective interest rates before considering income and expenses to ascertain if you can realistically afford to repay all outstanding balances at their full amounts.
Keep in mind that putting off paying debts could severely harm your credit score and may cause creditors and lenders to continue collecting outstanding balances. At the same time, negotiations take place, leading to wage garnishments, property liens, or even lawsuits against creditors and lenders. If the outstanding debt settlement isn’t an appropriate solution for you, consider alternatives like a debt management plan or 0% balance transfer credit report cards as possible solutions.
Debt relief companies can negotiate on your behalf for a fee, or you can attempt it yourself, but be wary if taking this route! There are important things you should keep in mind before undertaking this approach yourself.
Honestly Research The Possible Solutions
If you’re uncertain of your total debt load and creditors, consult a credit counselor or attorney. Both are adept at negotiating with creditors and can give an overview of all available solutions and how settling it yourself might work out.
Debt settlement companies typically negotiate with creditors on behalf of their clients to settle debts at an agreed-upon fee; however, overpromising on terms and timing could negate any savings gained through debt settlement companies. According to the Consumer Financial Protection Bureau, any penalties and fees accruing on outstanding accounts could undermine any savings gained.
