You may have been feeling a sense of panic over your financial debt for some time. In the beginning, you may have had some hope that you could pay down your balances and get everything under control on your own. However, you may now realize that this option no longer seems plausible.
As a result, you have been exploring various debt relief options that could potentially help you address your liabilities and get back on stable financial footing. Of course, when considering such options, you may want to ensure that you have the right information.
What is debt settlement?
One option that may be on your list of considerations is debt settlement. This route involves enlisting — and paying for — the services of a company that will work with your creditors in hopes of negotiating your debt to a lower amount. In some cases, this option can result in the desired outcomes, but in others, individuals may end up paying nearly as much as they owed in the beginning or not completing the program at all.
Will it work for you?
Whether this option could work for you depends on your specific circumstances. It may help you to know that on average, individuals who utilize debt settlement companies tend to pay approximately 65 to 80 percent of their original owed balances, which includes the fees charged by the settlement company that can total around 25 percent of your original owed amount.
It is also important to note that not all creditors will work with debt settlement companies. Some of your credit card holders may attempt to negotiate if they have your permission, but others will simply refuse outright to attempt negotiations with a settlement company. There may also be others who would attempt to negotiate directly with you but not a company.
What are your other options?
While debt settlement certainly is a debt relief option, it may not work in your best interests. Fortunately, other proven methods of debt relief exist, including Chapter 7 bankruptcy. You may feel hesitant to seriously consider bankruptcy, but with the right information, you may determine that this route could allow you to start a journey to a brighter financial future. If you would like more information on whether you could qualify for Chapter 7 and what the process entails, you may want to utilize local Texas legal resources.