Arkansas is home to 2,998,248 residents who are employed by 64,670 businesses across the state. The median household income is $41,371 (2015). However, there is a very high poverty rate of 19.1 percent in the state. With so many earners in the poverty range it can be hard to pay off existing debt, when they aren’t making enough to cover all their bills.
What Is Debt Settlement?
Debt settlement is an option those who have typically over $7,500 in debt can undertake to better establish a plan to payback their loans. Individuals contact a debt settlement company who in turn contacts the individual’s creditors to negotiate repayment terms. They typically are able to settle a debt with creditors for less than the original amount owed.
Why Would Creditors Settle For Less?
When banks, credit card companies, and other financial lenders allow persons to borrow money they want to receive that money plus the interest back. Unfortunately, sometimes individuals are unable to payback the full amount of what they owe. Many creditors would rather accept less than the total amount owed than spend their time and resources on taking a civil suit against the debitor.
What Happens While My Debt Is Being Negotiated?
During the time of the negotiation, the debt settlement company will typically establish an account for the debitor to submit their monthly payments until the debt is settled. This means the creditors are not receiving any payment during the negotiation time. This can be a risky process for an individual as the creditors will report to the credit agencies a neglect in payment during this time.
What Happens After Debt Settlement?
Once your debt settlement company comes to an agreement with all your creditors you will be responsible for paying a single monthly bill. This bill will be a combined total of what you owe monthly to all creditors. This greatly simplifies the bill paying process and helps decrease the number of late payments to creditors.
What Are The Benefits Of Debt Settlement
Debt settlement can drastically reduce the financial burden for those engulfed in debt and simplify the repayment process. The most beneficial reason to choose debt negotiation is that it allows you to avoid filing for bankruptcy. This will spare your credit rating and many attorney fees.
With debt settlement you can put a stop to getting calls from the collection agencies about past due bills. When you enter into a settlement with any creditor they no longer are able to take legal action against anything you did prior to the settlement date.
What Type Of Debt Is Eligible For Debt Settlement?
Debt settlement works for a large majority of debt. Including:
- Personal Loans
- Credit Cards
- Medical Bills
- Store Cards
- Payday Loans
Debts that are no able to be settled include:
- Educational Loans
- Tax Debts
- Child Support
- Car Loans
What Makes Me Eligible For These Services?
If you currently owe more than $7,500 in the type of approved debt listed above you can benefit from a settlement. If you have missed payments and collection agencies calling it’s time to seek out a debt settlement company. While credit counseling and debt management programs can be beneficial in some cases, if you don’t currently have the monthly funds to cover your monthly bills they’re not going to help. You need to decrease your monthly bills by acquiring the help of a debt settlement company.
Arkansas Debt Settlement Laws
There are currently no specific laws governing the practice of debt settlement in the state of Arkansas. All debt falls under the federal jurisdiction of the Fair Debt Collection Practices Act (FDCPA).