Debt Settlement Cannot Be Stated As A Quick Fix Though
Right now, advertising for debt settlement is becoming quite common. You might have received an email from a debt settlement agency or have just seen late night commercial. There are chances that you might have heard any radio advertisement, which promises actually to eliminate debt for the pennies on dollar. It is very rare when the ads address a long time will the debt settling procedure can take to function proficiently. There are so many exciting factors, which can indeed dictate the present time frame. You have to be sure of the steps that you are taking as anything to do with debt can be a costly affair later. So, be sure of the steps that you might have to make now.
The amount of debt you are in:
At first, you might have to determine how much of the present debt you have on your head, which you are planning to settle. The easiest way to resolve this amount is by just looking at some of the recent statements or even contacts the said creditors directly for any of the updated balance. Along with the principal loan balance in this regard, you might also plan to include any of the past due interest, fees or even talking about the late charges. Knowing about these plans is essential before you finally settle for the settlement help and the debt settlement ratings in town. It can often work great in your favor for sure.
Handling the interest charges and late fees:
For the next step, you might have to take a proper look at the terms and conditions of the said account. During this current debt settlement procedure, you might get into the point where you might stop making payments to the present creditors.
- It is your duty to understand the amount of monthly interest that you might accrue. It is associated with the points that actually impact the late fees and penalties, which you might have on the present balance.
- It is also quite important for you to note that if you have not done anything lately on the said account, then if that impact is missing any payment, which you might have on underlying interest rates.
- There are so many accounts, which have universal default clause and might even increase the present interest rate if you ever go late on the report, or if the account with another lender might be entirely monitoring in nature.
- You have to get these points straight in your mind before any other help in this regard for sure.
Focusing on monthly cash flow and current assets:
How much money has you actually currently saved that can be used in the present settlement procedure? There are some consumers, who might actually borrow money from any of the retirement accounts if any. They can use the money in the savings account, or get to sell some of their personal belongings for the sake of raising cash.
Also, be sure to know about the amount of money, which is available each month for contributing to the debt settlement account. Moreover, you have to keep in mind that you might no longer be making some of the monthly payments to creditors of the said account that you might want to settle.
Do your calculation right:
It is now your possible time to pull out a piece of paper, pen, and a calculator. Here, you might want to have any two columns. One column is settled for the amount that you have saved in the present settlement account. There will be another column, which will be for increasing the balances, which you hope to settle actually. Here, the rows will actually represent the number of individual months, without just moving forward.
- For the said purpose of your exercise, you can assume that most of the creditors in town will actually settle for around 50% of the current balance as owned. Now, it is time for you to start with the first month an add any of the existing or ongoing money that you can use for funding settlement account. It is also used for the first month’s payment, allotted with the same account.
- Then, in the second column, you have to list out the current balance for the account or more than one account that you might like to first settle for.
- For each one of the following month, you have to list out the new balances in the present settlement account, mainly because of the added payments and with the original form of the outstanding balance as owed to creditors.
- It primarily results from the combined interest rate, along with the late fees and some of the penalties listed out over here. If you fail to repay the amount on time, then sanctions are going to grow mainly on the settlement amount you had to pay. It comes with the extra payments on interest rate along with the original amount you have to pay.
For estimating the amount of processing time it might need for the debt settlement to work out on, you have to follow doing this exercise until the column one can actually equate to the approximately 50% of the said column too. In case you are planning to work with the debt settlement firm out there, you might have to consider the factors in the said fees or costs of the current services.
Help from the exercise:
The exercise is proven and here to help you allow in estimating how long it might take for you actually to settle the current debts. In most of the cases, you might come across that this step can often make a lengthy period of time from 12 to 36 months. After going through the exercise, if you determine that it will take longer than the settled 36 months or the current debt balance is increasing at a faster rate than the present settlement account balance, then you might have to explore some of the other options like bankruptcy.