Debt settlement can be a highly effective way for people to get their finances back under control. Debt settlement is designed to help people in over their heads get some relief without having to file for bankruptcy.
Consider how you can boost your chances of debt settlement success by implementing some of the following ideas.
Talk to a Credit Counselor
Speaking with a credit counselor can be hugely beneficial to people working through debt settlement. It’s often recommended that individuals speak to a credit counselor before deciding on a debt relief option.
There are several ways talking to a credit counselor can be beneficial. It’s important to remember that you don’t need to pay for basic counseling services. If an organization is trying to make you pay for information, it can be a red flag that it’s not providing legitimate credit counseling. Here are some ways you can help yourself by consulting with a credit counselor:
- Get advice on budgeting: Credit counselors can offer helpful tips for how to create and stick to a budget. This is an important part of general financial health, which can limit the need for debt settlement down the line.
- Loan counseling: Debt is the thing that gets people into financial trouble. Whether it’s credit cards, mortgages, student loans, or medical bills, loans can lead you to paying more in interest than what you can reasonably afford. Understanding how debt works, and the best ways to repay it, can be powerful knowledge.
- Bankruptcy counseling: No one wants to have to go through bankruptcy. But it’s something that happens to over 700,000 individuals each year. Learning about the pros and cons of bankruptcy is essential before deciding whether it’s the right choice, or whether you may be able to settle or manage your debts.
Keep Doing Holistic Work on Your Finances
Deciding to pursue a debt relief plan such as debt settlement is a great step to getting your finances back in order. But this isn’t going to save you on its own. You’re also going to need to ensure you don’t end up in the exact same place again.
The best way to guarantee this is to look at and do things that improve your holistic financial health. Creating a budget and speaking with a credit counselor both fall under this umbrella.
Overall, it’s important you avoid treating debt settlement like a flash diet. It can help you get out of your dangerous credit situation. But you still need to come up with a long-term plan for success.
Make Sure You Work with the Right People
Not all debt settlement is the same. Working with the wrong people can do you more harm than good. When deciding on a debt settlement program, you should do some background research to ensure other enrollees have had a good experience. Freedom Debt Relief, for instance, has settled billions in debt for thousands of people — some of whom have left reviews online. Make sure you pick a respected debt relief agency if you want to fully benefit from debt settlement.
Play an Active Role in the Process
Some people think debt settlement is a way to have someone else totally take care of their debt issues. While it’s true that debt settlement agencies will do the heavy lifting in terms of trying to negotiate better terms for your debt, you’ll still need to play an active role from start to finish.
It’s smart to check in with your debt management dashboard, and speak with a representative, on a consistent basis. This will let you know how your debt is progressing, and also alert you if anything isn’t quite right.
Boost Income and Lower Expenses
You’ll greatly improve your chances for success with debt settlement if you make some lifestyle changes along with it. Debt happens when you need to get money upfront to pay for a cost you can’t afford in your present situation. This is why people take on debt to buy a home or go to college.
But debt can also happen from many smaller purchases, such as those put on a credit card. This high-interest rate debt can stay around for a long time and cost you a lot. Boosting your income or lowering your expenses can provide a path for long-term control over your debt.
All these concepts can work together to give you the greatest possible chances for debt settlement success. The more you do to help yourself, the better off you’ll be financially.