The economy in Colorado has been slowing down, and it’s been difficult for residents since the recession began in 2008. Many of the millions of residents in Colorado feel more economic relief now than they have in almost a decade, but the economy is not improving as quickly here as it is in other state. The rising cost of gas and oil combined with the increasing unemployment rate in one of Colorado’s more prolific job markets, and payroll cuts of more than 17.5% since 2016, people are suffering. Many Colorado resident live with thousands of dollars in credit card debt and insufficient income to make their payments.

They’re drowning, and there’s little they can do. Many have already noticed a decline in their credit score after missing payments, skipping payments, and applying for more credit just to make ends meet. With this plaguing their lives, the inability to find a loan with a low interest rate to secure their debts and pay them off through consolidation is almost impossible. Even in cities such as Douglas and Pitkin where the median family income exceeds $100,000 on an annual basis, people suffer. More than 13% of Colorado residents live below the poverty line in the state, and that means many people are considering debt settlement as their only option.

Debt Settlement Laws in Colorado

Before you decide debt settlement is the right choice for you, it’s time to get to know what it means, how the law works, and what you can include in your debt settlement plan in Colorado. State law mandates no creditor or collection agency can seek legal recourse against anyone who has an account that’s older than 6 years from the date of your first missed payment. If you are considering debt settlement, you’ll want to avoid adding those accounts to your settlement as they will drop off your credit report after 7 years, and no legal action can be taken to reclaim that money.

The law requires all Colorado residents have more than $7,500 in debt, and that you’ve already missed payments to settle these debts. You can work with a debt settlement company or on your own to make this happen, but you must meet those two minimum requirements. In terms of which debts you can add to your settlement, it’s only unsecured debts. Cars, houses, and other tangible assets being used as collateral cannot be added to a debt settlement program. It’s also important to remember no creditor or debt collection agency is required to agree to any settlement offers or terms.

How Debt Settlement Affects Your Financial Life

If you decide a debt settlement program is the only option for you, you’ll want to know how it benefits you, how it affects your financial life, and if it works. Here’s the simple rundown on the benefits of debt settlement:

  • You pay off your debts faster
  • You eliminate your numerous interest rates
  • You are provided a much lower interest rate
  • Your debts are consolidated
  • Your debts are settled for far less than you owe
  • You begin improving your credit

If you choose to utilize debt settlement, you get to pay off your bills for less than you owe, and you get to stop seeing your late and missed payments reported to the credit bureaus. It won’t fix your score right away, but it does improve it and prevent it from becoming far worse.

The downfall of a debt settlement program is that your credit score is already negatively affected. You’ve already missed payments, made late payments, and racked up insurmountable debt. Now your credit score is going to suffer for seven years until those negative items fall off. Your credit score won’t go up with a settlement program, but it won’t get any worse as creditors are going to stop reporting your late payments to the bureaus.

Who Can Settle Their Debts in Colorado

Anyone who lives in Colorado and has more than $7,500 in unsecured debt can settle, but only if you cannot make your payments and have already missed them. If you want to settle but can afford to make your payments, don’t stop making them just to settle. The financial repercussions are too dangerous in terms of how your credit score is affected. If you have no relief, no financial ability to get back on track, and you’re desperate for help, this is the option for you.

Debt settlement is a huge relief for many people with financial burdens they’re unable to bear. It’s what makes so many Colorado residents feel hopeful for the future, and it’s one way to get rid of unwanted debt faster than any other option. Don’t enter into an agreement of this nature lightly without first considering how it will affect your financial life.