Are you a self-confessed
shopaholic who buys anything and everything that you get your shopping
addicted hands on? Such thoughtless and impulsive buying will most likely
result in the accumulation of a bunch of junk that will simply collect
dust. Can you even remember that silk scarf you just had to have and since
it was a virtual steal at 50% off you just had to buy it? Where is it now
and how many times have you actually worn it? Is it still fashionable?
If you're like most people, chances are you'll have to rummage through
bins and bins of collected shopping "litter" which you've accumulated
through the years, just to be able to see that once precious scarf. You
may still be in a state of denial by saying "Fashion goes round and round
and that scarf will have its shining moment once again."
Unfortunately, many people fall into this mode of impulsive buying that
they really can't afford and before they realize it they become saddled
with debt. If you fall into this category, you'll soon need to learn a
thing or two about debt settlement which can assist you in extracting
yourself out of that self-imposed state of financial trauma and begin to
start rebuilding your life bit by bit. And the time to start is now! Of
course, you have to be honest with yourself, admit that you've got a
serious debt problem and then humble yourself enough to seek the help you
need to pull yourself out of this devastating ordeal.
First things first, a lot of people may actually think that they only have
a few choices when it comes to solving their debt problems. The two most
common options for those who are burdened with enormous amounts of debt
are either to consider declaring bankruptcy or debt consolidation.
Unfortunately, if you take the easy way out by declaring bankruptcy, it
will leave an embarrassing and indelible mark on your credit report for up
to 7 years, which will result in higher interest rates, less credit and if
you try do qualify for a mortgage (some lenders do give loans immediately
after bankruptcy) you will most likely not be able to get a loan to cover
100% of the financing you need. Normally, an 80% first mortgage and if you
can get a second mortgage, it will be at much higher interest rate and
probably only 10% of the loan value for a total of 90% of the loan to
value and you'll have to come up with 10% down.
Clearly, everything will come with a higher price for a period of time but
you'll have to weigh that with a straight debt consolidation solution in
which you pay off your debt. However, in many cases you can negotiate with
the collection agency and it's realistic to get 25% - 50% of the debt
forgiven, if you can show that you'll continue to make monthly payments
until the remainder is paid off.
Many of the debt settlement / debt consolidation companies were actually
established by the credit card companies themselves. Why, you ask...
because it only makes sense for the credit card companies to help you pay
off your debt because they can either forgive some of the debt or reduce
the interest rates, lower the monthly minimum payment requirements or some
combination and get paid a portion of the money owed or receive nothing if
you declare bankruptcy. What would you do if you were in their shoes? The
answer is obvious. This is why a lot of people who have been saddled with
debt are now being offered debt settlement. Of course, not all debt
consolidation service companies are owned by credit card companies but
many are.
Some groups offer debt settlement programs through arbitration. The
"selling point" when it comes to these kinds of solutions is that debt
settlement will actually help end your debt problems, without having to go
through declaring bankruptcy, without having to pay overcharged debt
consolidation program fees as well as helping you avoid getting caught in
the debt consolidation trap that a lot of people have fallen victim to.
In many cases, what the organizations do that offer debt settlement
services is negotiate your debt down with the collection agencies that
have been given your case. I would encourage you to contact a number of
companies to ensure you feel comfortable and that you are working with a
quality company that doesn't over-charge you for their services.
On the other hand,if you would really like to save money, which only makes
sense since you are already heavily in debt... then negotiate with the
collection agency yourself. It's not difficult, rather than getting upset
when you get called night after night simply tell the collection agency
rep that you would like to pay off your debt but you can only do it if you
can get it reduced and then ask them that you would like to get the debt
you owe reduced by 50% - 60%, even 75% and ask them to see what they can
do. Ask for a lot up front because as in any negotiation there's always a
give and take. Believe me, they will go to work for you and your offer
will be seriously considered because they only get paid when they collect
and it's better to get their percentage on a smaller amount than "diddly
squat" on the full amount.
Of course, you'll have to decide what route you want to take... bankruptcy
versus debt settlement but shop around and realize that you do have
options. The internet is full of companies offering their bankruptcy or
debt settlement services, but be careful and don't let them push you
around and never work with anyone you don't feel 100 percent comfortable
with.
