Debt Settlement… Simplified. What Is Debt Settlement?
Welcome to Debt Settlement… Simplified. In this ongoing series we are going to provide you with detailed answers to the most commonly asked questions we receive.
It seems that many companies have over-complicated a rather simple concept. Making something seem complicated can give it have a higher perceived value, but let’s do away with the complexities and get real so you can make an informed decision.
If you have any questions you would like answered, ask away in the comments below!
So, let’s start with the most basic and fundamental question…
What Is A Debt Settlement Program?
Debt Settlement is a way to ease the difficulties of unsecured debts, such as credit cards. You and your creditors negotiate an amount that is less than what you owe to “settle” the debts balance. You pay a part of what you owe, and the creditor waives the rest.
For example, let’s say you owe $10,000 on a credit card. You or your FaithWorks Advisor would contact the credit card company and tell them that you want to negotiate a settlement. Usually over the course of a few phone calls, letters and emails, an agreement is reached. On our program the goal is to settle the debt for around 45% of what you owe. Once the agreement is reached, it is put into writing and the payment(s) is made.
Because this is a large reduction of the balance, the program is affordable and flexible.
And, of course… it is our specialty!
Here’s a bit about what debt settlement is NOT:
A perfect solution for everyone
There are drawbacks! Most are because payments are not made on your accounts until the settlement agreement is reached. Saving the funds and negotiating the settlements take time. During that time, your accounts stay delinquent which has drawbacks. This is why we suggest this program only when the accounts have already fallen behind , or inevitably will soon.
A Quick Fix
Debt settlement is not a quick way out of debt. It involves some work, patience and faith.
We do not have pre-arranged settlements with creditors. If you have 5 credit cards there are 5 different negotiations.
We are hear to guide you through the process to make it as seamless as we can. It is much quicker than making the minimum payments alone, but most programs take about 3 years time.
Only Available Through Companies
Another message that companies have tried to push into their advertisements is that only they can do it for you. This is not true! You can negotiate settlements with your creditors.
The value that we bring to the picture is that we have done it… thousands of times. I like to equate it to purchasing real estate. Sure, you can go it alone without a real estate agent, but chances are you will get a better deal and have a smoother process with an agent on your side. We have historic results to look back on so we know when you’re really getting a good deal. We know where to start the negotiations, when to accept an offer, and when to make a counter.
So while there is a definite value to using a company to help you settle your debts, you absolutely can do it on your own, too.
Your Only Option
Credit Counseling, The Snowball Method, Debt Consolidation, Budgeting, Credit Repair, Bankruptcy, Debt Management… the list goes on! There are many different programs and methods to reaching your financial goals.
Speaking with a FaithWorks Advisor can help you determine if debt settlement is right for you. We take an unbiased approach. If you are better fit for a different program, we will do our best to put you in touch with a reputable company that offers that solution.
That should just about sum up a birds eye view of the debt settlement process. There are some details that are different based on the individual circumstances. If you would like to learn exactly what it would look like for you, complete the form on the side of your screen.
