Dealing with even a small amount of debt may feel stressful and overwhelming. A debt-increasing interest charges and late fees to the mix, and it can get even more difficult to manage.
When you decide to tackle your debt, you might want to look into a debt relief program such as debt resolution.
What Do I Need to Qualify?
Keep in mind: getting out of debt isn’t easy, and a debt relief program isn’t a quick fix. In order to start a program –such as a debt resolution program– you’ll need to meet certain criteria, including:
1. Legitimate Financial Hardship
A debt resolution program works by negotiating with your creditors on your behalf to try and lower the total amount of money you owe. Debt negotiation can be an effective method for reducing and eventually paying off debt. However, most creditors won’t negotiate with a borrower unless they can show they have legitimate financial need to lower their debts.
Events like divorce, loss of employment, or unexpected medical bills can all lead to serious loss of income and qualify as legitimate financial hardships. Some creditors may agree to negotiate debts when events like this happen, but you’ll need to show that you cannot realistically pay your debts. Many people who choose a debt resolution program had also considered bankruptcy.
If you can easily make your payments and pay off the debt you owe, a debt relief program may not be right for you.
2. Overdue Unsecured Debt
Debt resolution can’t help you pay off debts with collateral involved (known as secured debt) like mortgages or auto loans. It can, however, potentially help you pay off unsecured debt like credit cards, medical bills, and unsecured personal loans. Because unsecured debt doesn’t have collateral attached to it, creditors can’t seize your property if you miss payments. They can, however, add late fees, increase interest, or send your account to collections.
In addition to unsecured debt, you’ll need to be at least a few months behind on your payments. If you’ve defaulted on a loan or have an account that’s gone to collections, debt resolution may be able to help. Being slightly behind on payments usually isn’t enough for creditors to negotiate a lower amount. Instead, they’ll try to get you to make up your missed payments and continue paying toward the full amount.
3. A Certain Amount of Debt
Even a small amount of debt can make you feel like you’re drowning in it. However, to start a debt resolution program, you’ll need to hold a certain amount of unsecured debt large enough that you cannot realistically pay it back without reducing it.
A higher amount of debt doesn’t guarantee that a creditor will negotiate, but it can be used as leverage for your case.
4. Regular Income
Once you enroll in a program, a bank account is opened in your name so you can deposit your monthly payments into it. . While you make those monthly deposits, negotiations with your creditor (for a lower total debt amount) kick-off. Once a settlement is reached and you’ve saved up enough money to meet the settlement agreement, your debts will be paid in a lump sum using the funds in the account.
That monthly payment is why it’s important that you have a steady enough income. Not having the income you need in order to make your payments could greatly delay your debt resolution program. Since your payments are going into an account to build up the funds to make one large payment.
Missing your payment consistently can throw your debt relief off track and cause you to potentially miss an agreed payment date. Of course, life is unpredictable, and unforeseen things happen, so as soon as you know you won’t be able to make a payment, you should let your debt resolution company know. They can help you figure out how to get your payments back on schedule.
On average, a debt resolution program can take two to four years to complete, so you’ll need to understand that your debts won’t go away overnight. The length of your individual program will depend on factors including how much you owe and how much you can afford to contribute towards your monthly payment. The sooner you can save enough funds in your account to pay your negotiated settlement amount, the sooner you’ll be out of debt.
You’ll need patience and discipline to successfully complete a debt resolution program. Some people get frustrated by a lack of change in their debt and want to leave the program after a few months. One of the most important things to accept before you start a program like this is that debt resolution isn’t going to solve your debt problems quickly.
Am I Eligible for Debt Relief and is It Right for Me?
Debt relief –such as a debt resolution program– could help you get out of debt, but it’s not for everyone. Talk with a professional debt resolution company, like Accredited Debt Relief, to see if you’re a good candidate for the program.
Get a free consultation to see if you can use debt resolution to get out of debt without facing bankruptcy.