When the economy goes on a downturn and the unemployment rates begin to rise, it is only a matter of time before consumers fall behind on car payments, mortgage payments and credit card bills. These late payments begin to snowball and within a few weeks late payments and fees begin to accrue and escalate the issue further. Now the consumer has missed payments, bounce check charges, late fees and interest piling on an already hopeless situation. This is when many people begin to panic and try to borrow their way out of the mess.
The hard truth is that borrowing money is like putting a bandage on a separated limb, you are not accomplishing much. The consumers will often times at this point look for loans to bridge the gap and slowly find out they are not getting approved for any loans due to the late payment history that is appearing on their credit reports. In these times of desperation many turn to the cash advance loans you see on television only to find out the repayment of the loan can sometimes be in the neighborhood of 800% interest. One of the only solutions for people in this situation is to consider a debt negotiation with the creditors. Debt settlement services offer the consumer a type of credit counseling that will enlighten them on all the options they have that will help them stop the credit issues from spiraling out of control, and give them some help fighting a solution to the credit nightmares.
For the average consumer, getting out of debt without a solid plan is a near impossible task. You can get yourself into debt fairly easily, however with the way today’s economy is heading downward, without the proper professional help you may be fighting a losing battle in the efforts to repair your credit. Many people today continue to use their credit cards as a source of additional income when the going gets tough. Using these credit cards for fuel, dinner and for frivolous expenses is a sure way to destroy your credit.
With many people facing desperate situations as their credit cards reach the limits, and the bill collectors threatening law suits, consumers are beginning to look into debt settlement services as an alternative to filing for bankruptcy. Before you consider working with just any debt negotiation company, you really need to do some research on both the company and what exactly you can expect from using this type of service.
When you consider the option of working with a debt negotiation company, one of the first things you will want to do is to be sure the company is accredited by USOBA. The United States Organizations for Bankruptcy Alternative helps consumers by reducing the risk of working with a company that may try to fraud them. Giving confidence to customers should be a priority one when it comes to a debt negotiation company, and by being a member of the USOBA or TASC shows consumers the company is serious about what they do and about getting your financial issues in order in a timely manner.
You have to know in advance that the process of repairing your credit and getting you out of debt is not a simple process, and this differs for each individual consumer. The negotiating company must be willing to take the time to clearly explain all the possibilities as well as all the possible outcomes one might expect. Making sure the company is accredited is the first step in the right direction towards getting yourself on the road to recovery.If you are comfortable that your negotiation company has the proper credentials to help you, see if they offer you any type of guarantee when it comes to their service. If they do offer a guarantee, make sure you understand all the specifics of that guarantee. Some of the questions you should ask at this point is if the debt settlement service is unable to settle your debts with your creditors, will they still charge you a fee. Your fee should be refunded if they cannot negotiate the outcome that you agreed to in your contract. If your debt settlement company promises you a quick debt fix and that it will not affect your credit, this is a sign of a company you do not want to work with. The hard truth is when you begin negotiations with a debt settlement service; your credit rating will most likely go down long before it goes back up. If you allowed your financial situation to get this bad, this is the eventual price you will have to pay for it. However, that being said, this is a much better alternative than having to file personal bankruptcy.
Just because you have gotten yourself in this financial mess, do not think that overpaying for a service to get you out of debt is the only option you have. You need to discuss with the debt negotiating companies you are considering exactly what the rates are and then once you are comfortable with the fee you need to make a realistic budget that you can afford for your monthly payback to creditors. Do not agree to a payback plan that is more than you can afford. If you think you will be able to cover it eventually because you expect a better job or cash coming in down the road, you are setting yourself up for disaster. Do not make the mistake of agreeing to a price that will not be realistic. You need to agree to a price that is well within your means so you can begin to show a reliable and consistent payment history. Debt settlement is the one way to handle your credit card mess and definitely a cheaper option thank filing for bankruptcy.
One simple way to research a potential debt settlement company is to go to your local Chamber of Commerce and see if they are an accredited member. If you are serious about repairing your credit and climbing out of this financial mess, then going a few extra steps to confirm the agency you are going to use to help you through these trying times is conducting their business in a proper way that benefits the consumer is of the utmost importance.
Additionally if you want to confirm the debt company you are working with has the proper skills to help you and your situation, you would normally check out their rating with the Better Business Bureau. However debt settlement businesses are not recognized by the BBB, and many states the BBB does not even allow these companies to join. You do have an alternative. If you are seriously interested in researching the company, then check out The Association of Settlement Companies. They also go by the name TASC and on their website you can research your debt company to see if they are abiding by the high standards the TASC demand.
Your financial situation has been spirally downward for what seems an eternity, but now you have the tools in place to get professional help to guide you on your way back to controlling your debts. Once you find a company that can negotiate your debts, be sure you make each monthly payment in a timely manner because you may not get the opportunity to ever repair your situation again. Consider this a second chance and make the most of your situation because you can repair the damage if you take the advice of your debt negotiation service seriously.