The economic state of El Paso County has contributed to some people falling behind on their credit cards and others defaulting on monthly payment. The credit companies and other lending institutions have therefore been offering debt relief programs to the citizens to help them settle their debts in time other than filing for bankruptcy. Debt settlement is one of the repayment methods available to the debtors in El Paso. Debt Settlement involves negotiations between the debtor and the lending institutions on the reduction of the debt balance. The lenders then regard the partial payment as the satisfaction of the debt.
Socio-economic Condition at the State Level
The economic activity in El Paso County has developed drastically since 2016 after the creation of 2.5% jobs, although the unemployment rate stood at 5.4%. The housing market remains high in the city registering a median value of $69,600. The median household income stands at $31,051. The state ranks among the lowest in Texas for the people with health insurance, which denies the residents accessibility to proper health care. The education rate at the county is on the lower end, contributing to rising poverty rates at El Paso.
Rich versus the Poor Inequality
The economic segregation is at the highest point in El Paso with the affluent occupying certain neighborhoods and the poor living in their region. The presence of people of different race, ethnicity, and varying educational levels has been the main causes of the divide among the Texas residents. El Paso ranked seventh on the listing of the top 100 counties with highest income inequality. The enormous economic difference may be one of the contributing factors of high debts among the economically challenged in the county.
Debt Settlement Eligibility Criteria
Many companies in El Paso provide debt settlement services to people who have accumulated debts of more than the $ 10,000 although there are others that would go as low as $7500. If you are in a debt settlement program, you may have to contribute a set amount of money every month for about 36 months or more depending on the debt amount. The debt settlement company then transfers the money into an escrow account before using the savings to settle the debts. The creditors usually evaluate your eligibility for a debt settlement program by reviewing your current financial condition to check any demonstration of a financial hardship on the debtor.
How Debt Settlement Works
Anyone can carry out the debt negotiations with the insurer but it is advisable to seek help from a debt settlement lawyer or company. The lawyer or company carries out negotiations on behalf of their client with the aim of getting the lowest amount possible. The process of debt settlement begins from the moment you make a call to the debt settlement company. Below is a guide on how most companies in El Paso handle debt settlement:
Evaluation– a debt settlement professional from the company assesses the client’s debts and the financial condition. The expert asks some question to determine your eligibility for the settlement program.
Adjustment– the insurance company works hand in hand with the clients to determine the right monthly payment capacity. The monthly payments reduce the debts while at the same time saving some extra money.
Implementation– this involves monthly payments to an account, which the debt settlement company uses to repay your debts. The company allows you to modify the income at any time depending on your preference.
Negotiation– once you have accumulated enough money in your account, the debt settlement professionals carry out negotiations on behalf of the client until they reach a reasonable pay. The company notifies the client once they come to an agreement so that they can make the lump sum payment.
The company moves to another lender upon completion of payment from one creditor and the same continues until the debtor repays all the debts. Most debt resettlement companies or lawyers try to negotiate smaller debts first and proceed with the larger once the borrowers repay the lower amounts. Debt Settlement provides a way out other than filing for bankruptcy. It provides a lesser time to repay the debts compared to the traditional methods.
Laws and Regulations in Debt Settlement
The Federal Trade Commission (FTC) is responsible for the regulation of the consumer rights and the formulation of the debt settlement rules. The law requires any settlement company to disclose all the fundamental aspects of the service that they provide without omissions. At no time should the debt supplement provider make false claims about their services or charge upfront fees for their services.
Apart from debt settlement, El Paso residents can choose other ways of managing their financial crisis. Some of the other alternatives include counseling, debt consolidation, or debt management programs. Filing for bankruptcy is also a viable option although it would be the last option after exhaustion of all the options. Remember that debt settlement can affect your credit score, but it will improve after some time.