If you are finding it difficult to make your bill payments and wish to get rid of them, you can negotiate with your creditors and request for settlement. You may also enroll in a online debt settlement program offered by debt relief companies to pay off debt.
How can I get rid of debt without professional help?
You can become debt free all by yourself with the help of the following guidelines:
Negotiate with your creditors: You must inform your creditors about the financial crisis you are facing and start negotiating with them to reduce your outstanding debt balance.
Prepare a budget for yourself: If your creditors agree for settlement, you have to pay a lump sum towards your bills. So, you must save sufficient money to pay off debt. You can do this by setting a saving and spending budget for yourself. The money you save by cutting costs will help you settle your bills faster.
Increase your income: You must also search for ways to increase your income. You can either take up a part time job or rent a portion of your house. The extra income will help you accumulate the lump sum required for settling your bills.
When you are unable to pay the bills, creditors normally anticipate that you may declare bankruptcy to become debt free without paying them. So, they are generally ready to go for settlement. But in case you are not able to negotiate properly with the creditor, you may opt for a settlement program offered by debt relief companies to pay off debt.
What is a settlement program?
The relief company negotiates with your creditors to reduce your outstanding bill amount by 40-60%. Instead of paying your creditors, you start saving money in a trust account monitored by the relief company. When you have saved sufficient money in the account, you can finally pay off debt.
Settling your bills will affect your credit score. But it does not lower your credit score as much as bankruptcy does. So, when you have fallen behind on your bills and cannot find ways to make them current, you can opt for settlement to pay off debt.
There are several instances when creditors filed lawsuit against debtors despite the fact that they had enrolled in a online debt settlement program. This is because it was found later that the debt settlement company had pocketed most of the cash and not made regular payments to the creditors. So, it is important that you keep track of your payments and find out how the cash that you pay for debt settlement services every month is being utilized.
There are reliable and authentic debt settlement companies too. You can find out these companies by going through the Reliability report of the BBB or Better Business Bureau. Remember, a firm offering authentic online debt settlement services will not send individual mails or fill your mailbox with spams. You are more likely to find these companies either through referrals or by checking its past records. They do promote debt settlement services but on a large scale that reaches the consumers as a whole.
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Diana Perkins, who is a member of the biggest debt community, writes on topics like debt help, online debt settlement, debt relief etc.