If you’re a Mississippi resident struggling with debt, you’re not alone. Although the typical Mississippi resident has a credit score around 685, they also have over $4500 in credit card debt. While this amount is lower than the national average, it isn’t something you should ignore.
Credit card debt is extremely easy to fall into. When you can charge whatever you want to a card, responsible spending can go right out the window. You can buy, buy, buy thinking that you’ll pay it all off later, only to find that later is here and you don’t have any cash.
Getting out of credit card debt can be a serious struggle. If you don’t have the money to pay the minimum monthly amounts, you could be hit with fees and late charges. Even if you’re making the minimum payments, your interest rate could be adding money right back to your overall amount.
If you feel like you’re making monthly payment after monthly payment and you’re not getting anywhere, you may have another relief option. Debt settlement can help you reduce the overall amount that you owe, putting more money in your pocket.
What is Debt Settlement in Mississippi?
Settling a debt in Mississippi means that you are asking for your creditor to agree to take a lower amount than you owe in order to close out the debt. Through this negotiation strategy, debt settlement reduces your overall payment, giving you more financial freedom.
Debt settlement can be extremely beneficial when used correctly. If you’re already struggling to meet your minimum monthly payments, the debt settlement process can allow you to end your contract early so that you can begin focusing on saving money or paying off other debts.
But debt settlement isn’t right for everyone. Debt settlement can have a negative impact on your credit score, hurting your chance of borrowing money in the future. You need to understand all the rules, regulations and consequences of debt settlement before applying to a relief program.
How Does Debt Settlement Work?
Settling your debt involves more than just calling up your creditor and asking them to reduce the overall payment that you owe. Because your creditor wants as much money from you as possible, they will try to avoid settling the debt as long as they can.
To convince them to settle, you need to allow your creditor to believe they won’t get money from you otherwise. This involves missing payments, allowing your debt to go into default, and ignoring contact from your creditor or debt collection agency.
While skipping your payments can be easy if you don’t have the money to make the payment, it can severely hurt your credit score. Each time you miss a payment, you’ll see your credit score get lower and lower. In addition to that, not paying anything on your debt can cause you to rack up pretty expensive fines and fees.
Once you’ve defaulted on your loan enough, you’re able to come to your creditor and propose a settlement amount. They may accept this amount and agree to close out the debt once you’ve paid. You will typically need to pay the settlement amount up front and in full, which can be a challenge if you haven’t been saving to prepare for a settlement.
However, your creditor may not agree to your settlement amount. If you can’t get the creditor to settle, you’ll need to eventually file for bankruptcy or make the payments you’ve missed – plus all the extra fees and charges you’ve racked up.
Rules and Regulations for Debt Settlement in Mississippi
Mississippi residents are able to settle their debts with their creditors, but there are a few rules and regulations they must understand about their debt. These regulations outline what debts are considered valid and need to be repaid and what are not.
First, debt collectors in Mississippi must comply with the Fair Debt Collection Practices Act. This act states that Mississippi debt collectors cannot use unethical, abusive, or deceptive practices to get money from a debtor. Individuals who believe a debt collector is not complying with the standards from the Fair Debt Collection Practices Act should report them immediately.
A debt must also be within the statute of limitations in order to need to pay it. In the state of Mississippi, that is 3 years from the last payment that was made. Check to see if your debt is still valid before you make any kind of payment on it.
Debt settlement can provide you with the debt relief you need to get back on your feet financially, but be sure you know what you’re getting into before that happens.