Of course, you want to settle your debts, if you’re over your head in debt, you don’t really care how you got there. But you should, as learning how to budget will not only get you out of debt now, but prevent you from finding yourself in a similar circumstance in the future.
Now, take a deep breath. All new things seem overwhelming. You may have big doubts about doing this - you may have been told by debt settlement “professionals” that you will not be able to do this yourself, and that they are the only ones who know the secrets. Not true.
Types of debts
There are two basic categories of debt, for the purpose of this article, secured and unsecured.
Unsecured debts include:
Medical bills
Credit cards
Department store cards
Personal loans
Student loans
Bounced checks
Secured debts include:
Home loans
Auto loans
How long does the card debt settlement process take?
If you are making a lump sum payment to settle your debts, the process can take as little as one month. That is, of course, if negotiations between you and the creditor don’t drag out. Obviously, if you are making payments to settle the debt, it could take as long as 4 years to settle your debts.
The Original Creditor
The original creditor is the credit card company or lending institution that issued your loan or credit card. If your account is not in collections, then the company you want to deal with is the original creditor. If your account has been turned over to collections, then the original creditor will not even deal with you – they’ve taken their IRS tax deduction and have assigned or sold the debt to a collection agency.
Before you attempt to settle
You should do everything possible to prevent your debts from going to a collection agency
Simply put, it is usually easier to negotiate with the original creditor. Avoid having an account turned over to a collection agency at all cost. It varies from creditor to creditor, but most credit card companies allow 120 days to 210 days before an account is charged off.
You are definitely in the danger zone after 120 days. After a debt is charged off, typically, the account is turned over to collections. While the account is considered a “past due” account and may be approaching the charge-off stage, it is often possible to prevent the charge-off by at least making one payment, along with all late fees. This holds the account from going further past due.
Once the normal payment is being paid regularly, even though the account may remain past due, regular monthly payments may prevent further delinquency and prevent charge-off. Even better, would be to pay the normal monthly payment plus a little more in order to begin to catch up the past due payments.
If a larger than normal payment is made, it may eventually catch up the past due amount and eventually cause the account to become current. Many creditors will allow you to keep your accounts open or even to reopen them if you bring your accounts current. They also have programs where you can make 3 payments which are larger than the minimum in order to catch up and bring your account current. You may want to consider these options.
******Usman ahmed owner of this blog created this post with his knowledge.All content provided on this blog is not copied from any other blog and site and is for informational purposes only and The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site.The owner will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information.
Now, take a deep breath. All new things seem overwhelming. You may have big doubts about doing this - you may have been told by debt settlement “professionals” that you will not be able to do this yourself, and that they are the only ones who know the secrets. Not true.
Types of debts
There are two basic categories of debt, for the purpose of this article, secured and unsecured.
Unsecured debts include:
Medical bills
Credit cards
Department store cards
Personal loans
Student loans
Bounced checks
Secured debts include:
Home loans
Auto loans
If you are making a lump sum payment to settle your debts, the process can take as little as one month. That is, of course, if negotiations between you and the creditor don’t drag out. Obviously, if you are making payments to settle the debt, it could take as long as 4 years to settle your debts.
The Original Creditor
The original creditor is the credit card company or lending institution that issued your loan or credit card. If your account is not in collections, then the company you want to deal with is the original creditor. If your account has been turned over to collections, then the original creditor will not even deal with you – they’ve taken their IRS tax deduction and have assigned or sold the debt to a collection agency.
Before you attempt to settle
You should do everything possible to prevent your debts from going to a collection agency
Simply put, it is usually easier to negotiate with the original creditor. Avoid having an account turned over to a collection agency at all cost. It varies from creditor to creditor, but most credit card companies allow 120 days to 210 days before an account is charged off.
You are definitely in the danger zone after 120 days. After a debt is charged off, typically, the account is turned over to collections. While the account is considered a “past due” account and may be approaching the charge-off stage, it is often possible to prevent the charge-off by at least making one payment, along with all late fees. This holds the account from going further past due.
Once the normal payment is being paid regularly, even though the account may remain past due, regular monthly payments may prevent further delinquency and prevent charge-off. Even better, would be to pay the normal monthly payment plus a little more in order to begin to catch up the past due payments.
If a larger than normal payment is made, it may eventually catch up the past due amount and eventually cause the account to become current. Many creditors will allow you to keep your accounts open or even to reopen them if you bring your accounts current. They also have programs where you can make 3 payments which are larger than the minimum in order to catch up and bring your account current. You may want to consider these options.
For The User
******Usman ahmed owner of this blog created this post with his knowledge.All content provided on this blog is not copied from any other blog and site and is for informational purposes only and The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site.The owner will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information.
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