Being in debt can cause a lot of stress. Your creditors want to be paid back, but if you are unable to manage financially, it can seem like there is nowhere to turn. However, there is always the option of debt settlement. Each state in the United States offers this service, including Virginia. Debt settlement is a service that is good for individuals who are having difficulty paying back their debt because creditors will allow you to pay less than the full amount you owe. There are two options for debt settlement in Virginia: you can either negotiate directly with your creditors or find a debt settlement company or law firm within the state to help you.
Negotiating with Your Creditors
If you choose to go the route of negotiating with your creditors on your own to avoid paying fees for professional services, you must follow certain steps to do so correctly. The first thing to do is to contact your creditors and explain your situation, that you want to pay back your debt but are having difficulty. Ask them about the possibility of paying your debt minus any interest that might be tacked on. In many cases, creditors will accept a reduce amount through negotiation because they want to be paid back. Additionally, creditors tend to be more receptive to debt reduction than bankruptcy because the latter if far more time consuming.
One thing to keep in mind is that when you negotiate on an amount with creditors, offer as much money as you can manage. It will be more likely that you will reach a settlement. Also, if you owe a lump amount, try to request an installment plan to make things easier. You would be surprised to learn how many creditors are open to such a negotiation.
The last thing you should do is check that your creditors report your settlement as being paid or settled to the major credit bureaus after you have paid back your debt.
Using a Virginia Debt Settlement Company for Paying Back Your Debt
There are several debt settlement companies located in the state of Virginia that can help you to settle and pay off your debt if you are not comfortable with contacting your creditors to do it on your own. Although you have a choice of companies that can provide the service to you, it is wise to check the credentials of any company. A reputable debt settlement company in Virginia will be accredited by the Better Business Bureau. Avoid any companies not accredited by the BBB and that have low scores with it so that you can avoid a potential scam.
A debt settlement company affiliated with the BBB will offer the best options for debt reduction, credit management, elimination of late fees and other services. Many companies will also allow you to have a percentage of your total debt used toward their fees. An accredited organization will also not charge you until it has successfully settled your debt with your creditors.
After you have chosen a company to settle your debt, a lawyer with the company will go over all your paperwork related to your debt and devise a debt settlement plan that’s best for you. The lawyer will then contact your creditors to request that they stop all communication with you and inform them that any payments will be given to them through the debt settlement company. He or she will also negotiate with your creditors to come up with an amount that is fair and acceptable for both you and your creditors so that you can finally pay back your debt, and come up with a repayment plan that works for you.
On average, the entire credit card debt settlement process in Virginia takes around three to nine months, although other types of debt can take as long as a year to three years to be settled.
When you decide to go with debt settlement, one of your ultimate goals is to improve your credit score. However, the effect the service has on your credit score is not predetermined and can affect people in different ways, depending on their situation. How long it takes for your to pay back your debt and the amount you owe has a great impact on your score.
These are your options for debt settlement in Virginia. It is best to consider which course of action is most appropriate for you before choosing how to settle your debt. You should also research a few different Virginia debt settlement companies to ensure that you enlist the services of the best one.