If your credit card debts are giving you nightmares and the Covid-19 pandemic has taken a toll on your finances as well, why not consider the option of trying a debt management plan.
This pandemic proved to be a hard time for a lot of people and if you too carry a story that has left you in a pool of debts and you see no way out, you could possibly try debt settlement.
Why opt for debt settlement?
For instance, until last month, you had a kicking job and then the pandemic hit you hard in the face and you got laid off. Now, all you have is a huge credit card debt that would possibly cost all your savings.
Here comes a debt settlement plan to your rescue. You have the option of settling your debts with your creditor. In a this plan, you can offer him a lesser amount for the sum that you owe.
But why would he agree to this? Because if he disagrees to settle your debt, you have an option of filing for bankruptcy. In this case, you will have to return nothing to the creditor, and he will be in pure loss.
How Debt Settlement works?
Debt settlement is basically when your creditor settles for a lesser sum than what is due for payment.
Debt consolidation plans or debt management plans can also work for the same issue. However, debt settlement services proves to be an efficient option in such cases.
So, if you opt for settling your debt, the company asks you to stop making payments towards your creditors. When your accounts become delinquent, your company comes in and negotiates a deal with the creditors on your behalf.
Meanwhile, you keep paying the debt settlement company a certain amount so that it can stockpile the money. This way they will have some amount ready on hand to offer to the creditors as when the deal sets in. The company charges a fee for this process under the debt settlement.
However, debt settlement can take a good amount of time to be achieved. This could also count a few years, only when the creditors accept the deal and agree to settle with the offer.
By the time you could find yourself paying the money to the company. This is just like in the case of a debt management plan where you keep paying the company a certain amount in a fixed time interval. The company, however, charges a fee for the process along with the tax liability.
Options that could come handy for debt settlement
Debt settlement services in New York City offered by our company can always save you the extra time and efforts and can assure you fruitful results.
But in case, if you do not wish to work alongside a debt settlement company, you can always take up the matter in your hands. You can hire yourself a lawyer who can handle the matter and do the talking. This would ask for your consistent look into the matter which can be hectic.
You can also opt to send in a letter to the creditors explaining your circumstances and make an offer to pay your affordable sum.
Debt settlement, however, has its own set of pros and cons which a person must study carefully before investing into.