The desire to live debt-free is common among South Dakota’s almost 900,000 residents. This is among the lease densely populated states in the country, giving it a charming, relaxed ambiance that its residents enjoy. While many South Dakota residents take advantage of great job opportunities found throughout the state, the reality is that debt is a burdensome problem for many who live in South Dakota. Some people are able to reduce debt balances on their own through the hard work of making regular payments on time each month, but others have such high monthly payments that they are no longer able to make ends meet. If you fall into this latter group and are looking for an effective form of debt relief to improve your financial situation in South Dakota, take a closer look at how debt settlement can benefit you.
The Typical Financial Situation in South Dakota
It is understandable that you may feel alone in your financial challenges. Few people openly discuss their personal finances with others, and you may feel embarrassed about the amount of debt that you carry. However, the reality is that the average South Dakota resident has a rather tight budget, and many carry credit card balances like you do. The. U.S. Census Bureau states that almost 14 percent of residents in this state live in poverty. While there are also many residents who are independently wealthy in South Dakota, the average resident as a low annual income. The annual per capita income in this state is $26,747. Because the average South Dakota income is low, expenses can be challenging to pay. Housing is a prime expense in most budgets. While South Dakota has an affordable cost of living compared to many other states, housing is still rather expensive for local residents to pay for. The typical South Dakota homeowner pays $1,210 per month as a mortgage payment. In addition, the typical renter in this state pays $655 per month for rent. If you have high debt balances and an average income, it is reasonable to see why you may be struggling to make your debt payments each month.
What Is Debt Settlement?
Debt settlement is a term that many in South Dakota have heard in the past, but you may not be certain what it is. This is one of several debt relief options that you can pursue. It is unique from other options because it requires you to negotiate directly with your creditors for a reduction in the outstanding balance you owe them. Creditors may choose not to accept your offer, but many will agree to a reduction in your outstanding balance of at least several hundred dollars or more. This is opposed to debt consolidation, which keeps all of your debt balances at the same level and simply adjusts the loan term so that the monthly payment is easier to make.
How Debt Settlement Can Benefit Some Individuals
Shaving a few hundred dollars off of a high debt balance may not seem like it would be sufficient to help you improve your financial situation. However, for many people, this will result in enough savings on monthly debt payments that the individuals can then make their debt payments in full each month. If you walk through the entire debt settlement process and find that your payments are still too high, you will need to file for bankruptcy. You should be aware that debt settlement can damage your credit rating just as bankruptcy does, but debt consolidation typically does not have long-term credit rating effects. Because of this, most people who choose debt settlement over consolidation are those who already have a lower credit score.
The Types of Debts That Can Be Negotiated
Debt negotiation and settlement can be an effective way to improve your financial situation, but keep in mind that not all of your debts can be settled. Credit cards and other unsecured debts are most commonly negotiated. However, if your unsecured debts are backed by the government, which is the case with many types of student loans, these debts cannot be negotiated. If your debt load is not heavy with credit card debt, you may not benefit sufficiently from consolidation.
The goal to improve your financial situation and to reduce debt balances is common in South Dakota. Each individual will need to review his or her personal budget and debt load to determine the best course of action to take. If you already have a lower credit rating and you cannot make your monthly payments on credit card accounts, you may be a great candidate for debt settlement. By speaking with a credit counselor about your financial situation, you can learn more about the benefits of this form of debt relief.