Do you feel like you’ll never get out of debt? Are you struggling to make the minimum monthly payments on your credit card, only to have interest come in to completely wipe away the small dent you made? Does it seem like there is no end in sight to the constant financial struggle you’re in?
Getting out of debt can be difficult. If you’re unable to make the money you need to repay what you owe, you may feel like you’re destined to live a life where you never really have enough money.
For residents of Ohio, you do have another option. Debt settlement could give you the break you need to get out of debt and start being financially free.
Ohio is one of the many American states with a great divide between rural and urban areas. While life in the city and life in the country may be extremely different, individuals in both areas may struggle to meet their monthly minimum payments. Debt is not reserved to one area.
Debt settlement in Ohio can be an option for all residents if they fit the qualifications. However, understanding how debt settlement works is the first step in relieving your uncontrollable debt.
How Can a Debt Settlement Program Help?
When you apply for debt settlement, you’re looking to negotiate a smaller debt amount that you will pay in full. By paying an immediate lump sum to your creditor, you’re reducing the overall debt that you owe and closing the debt out. While this calls for a large payment upfront, you will end up saving money in the long run.
Your creditor typically agrees to settle the debt if they believe it is their only chance for getting a payment from you. If it seems that you will be unable to repay what you’ve borrowed, they may agree to the smaller amount that you’re offering.
What are the Negatives of Debt Settlement?
Settling your debt means that you admit you’ve borrowed too much money and you’re unable to pay it back. No matter how you come to this conclusion, this can reduce your borrowing credibility and hurt your credit score.
Debt settlement can be particularly damaging to your credit score because it requires a strategy for gaining control over your creditors. If your creditors believe that you are going to repay your debt, they will not agree to a settlement amount. This typically means you need to skip payments for months before you can begin the debt settlement negotiation process – which can do serious damage to your credit score.
However, if you are actually unable to make your payments, then your credit score is not a serious problem. You need to first focus on getting out of debt’s hands and then worry about repairing your financial health.
Who Should Consider Debt Settlement in Ohio?
Because debt settlement is not all positive, you should seriously consider your other options before settling your debt. If you are only looking to save some money or get out of paying the money you owe, debt settlement isn’t the right option for you.
If filing for bankruptcy makes more sense for your situation, this should be considered over debt settlement. Going through the debt settlement process can be just as damaging to your credit score as bankruptcy and it only eliminates one debt. If you have multiple debts that you are unable to control, consider bankruptcy instead.
Debt settlement is right for you if you have uncontrollable payments on an unsecured debt, such as a credit card, but you do not qualify for bankruptcy. Debt settlement may also be right for you if you only have one debt you can’t manage.
What Kinds of Debt Qualify for Settlement?
You can not settle any debt through debt settlement. If you are struggling with a secured debt, such as a mortgage, you will not be able to find relief through debt settlement. In that situation, you have presented an item, such as your house, as collateral for the debt you’ve taken.
Debt settlement is an option for unsecured debts. Unsecured debts, such as credit cards, do not have collateral attached to the money borrowed. If you do not repay the debt, your creditor does not have a way of getting the money back. This can give you the leverage you need to ask them to settle for a smaller amount.
For some, debt settlement can be the break they need to get out of debt. But before you sign up for a debt settlement program, be sure you understand exactly what it means and what consequences it can have.