Debt settlement – Five Steps on How to Get Rid of Debt Without Filing Bankruptcy

By | September 5, 2014

Due to global economy crisis in 2008, there is an increasing number of Americans filing for bankruptcy currently as they are unable to solve their huge debts. In fact, many people are struggling from this financial hardship in order to survive. They are forced to give up their luxurious life in order to settle their debt issues. However, filing bankruptcy is not the only solution. You can actually be debt free with a strong determination, discipline and hard work. Yet you are still able to enjoy your life.

What is the alternative for filing bankruptcy?
It is debt settlement. Let’s see the practical guide here for better understanding.

Step 1:
Start your first step towards financial freedom by getting yourself a debt settlement company which offers services that suit your needs most. The role of a debt settlement company is to act and work on behalf of you as a client to negotiate with your creditors to solve your debt issues.

This company is responsible to assist you to obtain the best deals from your creditors and solve your outstanding debt in a professional way. As a result, first thing first, spend some of your time to search for reliable debt settlement companies in the market.

Step 2:
You are reminded to do detailed checks on the reputation of a debt settlement company before signing up with them. This is because they will be fully responsible in administering your monthly payments. Beware of scams. Some companies have been accused of mishandling customer payments and they have caused more credit damage to the clients. As a result, looking for a reliable company is essential.

Step 3:
Once you have decided which company you want to engage the services, the officer in charge of your account from the debt settlement company will guide you to stop making payment to your creditors. At the same time, you are required to deposit a certain amount of money into a saving account on monthly basis. The officer in charge will also help to take over all the collection calls from your creditors.

Step 4:
Since you are required to contribute certain amount of money monthly into the specific account, you will definitely be able to accumulate a good amount of fund after certain period of time. When you have sufficient fund in your account, the officer in charge from the debt settlement company will then start negotiating with all your creditors one by one for lower interest rates.

The creditors will be convinced that their debtor is not able to pay all the debts in full and they would agree to accept a reduced amount of repayment after negotiation. During this process, you are totally out of the picture. You don’t need to deal with your creditors directly.

Step 5:
Finally, all your outstanding bills can be settled with the lesser amount and you can be debt free. The debt settlement company is fully responsible in preparing all the related documents to free you from debts.

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