Debt Settlement in Burleson Texas: 4 Things to Know

There are several ways to fix your finances. If you’re drowning in debt and can’t see a way out, you might want to consider debt settlement, which allows you to pay only a portion of the debt. However, there are several things you need to know before you decide this is the route for you.

Know How Debt Settlement Works

Before you can decide if debt settlement in Burleson is the best possible approach for you, you need to know about the process. Do your homework. A clear understanding of what happens during a debt settlement will tell you what to expect and whether it can address your financial situation.

It Might Hurt Your Credit

Debt settlement means you’ll need to stop paying your credits for a specific period while banking all that money into an account. You could end up with penalties or late payment fees, though. If you are already behind then the damage is already done in most cases. However, once you repay the debt, you can quickly rebuild your credit. Also, your debt-to-income ratio will be drastically improved because all of your settled debt will show a $0 balance.

Your Creditor Might Not Say Yes

Not all creditors agree to debt settlement offers, but most major creditors will agree in most situations.  But that’s where credit counseling in Burleson. Talking to a credit counseling service or debt settlement company and it might help you get a better handle on why this plan is right for you. With the knowledge and advice from your credit counseling sessions, you’ll know enough what to do, how to approach your lenders, what to say, and how to get them to agree with the debt settlement plan. Remember that credit counseling and debt settlement are two different program and not all companies will offer both services.  You might need to contact two different companies.

You Might Pay Fees

Credit counseling companies do not negotiate your balances. They will usually lower your interest rates and the credit counseling is usually paid for by the creditors, although they may charge you a small monthly fee. Debt settlement companies are not non-profit, so you will pay a fee for their successful negotiations. However, they will not charge you upfront fees, so the risk is low. If they do not settle a debt, they will not collect their fee. Some debt settlement companies offer legal insurance plans to provide additional protections while enrolled, but they are not required to settle your debt. Always research a company using the Better Business Bureau and read any complaints. Look for an accredited company located in Texas that charges low fees.