There are reports showing that an estimate of 10% of those enrolling in a debt settlement program actually achieve what they set out to do – get a significant reduction in their debts, pay it off completely and have the rest forgiven. The other 90% either went out to complete payments on their own or give up entirely and file for bankruptcy. Some of them got themselves even further into debt than when they started.
Most of you reading this may be slightly discouraged at the figures and while it is a normal reaction, you need to know a few things. The first is debt settlement does work. We have the 10% to prove that. It may be a small statistic but it goes to show that there is nothing wrong with the concept.
So what happened to the 90%? Or probably the right question is, what did the 10% do to make this debt relief work for them?
Most of the people who think so negatively of debt settlement are usually those who did not succeed at it. For one, most of them complain of the service fee that debt relief companies charge.
First and foremost, they should have read the laws stated under the Telemarketing Sales Rule or TSR. It is stated there that no debt relief company is allowed to charge an upfront fee. Secondly, they are not allowed to ask for fees unless there is proof that they have successfully negotiated for a reduced debt with your creditor or collector. If you the company you are talking to now are asking for fees before results are shown, you should switch companies.
If the service fee is bothering you, remember that debt settlement is something that you can do on your own. While it can be stressful on your part, that is the price you pay for skipping on the professional fee.
Another complaint that we receive is the fact that people find themselves deep in debt once more. If you want to make sure that debt settlement will work for you, go to the root cause of the problem. This is actually a must for any type of debt relief that you will take on. Don’t concentrate on just paying off your debt. You need to create a budget and spending plan to make sure that you will not land in the same position again.
Debt settlement can provide real savings and benefits to debtors. However, it is not the only solution. Another problem that we can identify as to why people cannot find debt relief through this program is because of their attitude towards it. There is no magic solution wherein you do not pay for your debts at all – except for bankruptcy of course but you will find that the repercussions will echo for the next 10 years.
Any form of debt relief has pros and cons and the same is true for debt settlement. While there are creditors who accept debt reduction, it is not a guarantee. That is why the law states that the debt relief company should never ask for fees unless the debtor is shown proof of a successful settlement. You need to be patient if you get “NO” for an answer.
What we can assure you is this: debt settlement is a legal way of achieving debt relief but only for those who are in a real financial crisis and who are willing to address the root cause of their debts. Ultimately, your success will lie in how much you know about it. This may be a disconcerting and frustrating time in your life but you need to take a grip of yourself and get your wits together. Research and approach the right people/company who can truly help you.