Would Debt Settlement Help with my Credit Card Debt?
I am collecting social security. I lost my job in Oct., and will be able to collect unemployment for a while, but have too much unsecured debt at this point in my life. I have a mortgage which I can pay, but will not be able to keep up with credit cards. I have never been late paying anything!
Would debt settlement help me?
Debt Settlement is certainly an effective approach to get from under a crushing amount of credit card debt – for the suitable candidate. The best methods to use in determining suitability will weigh heavily on the balances on your credit cards and other revolving debt, and also who your creditors are.
Each of your creditors have their own set policies, timing and percentage of balance targets when negotiating delinquent accounts. You will generally need to speak with a reliable source that is willing to share with you what your particular creditors are willing to do with balance concessions. When you have this detail you can better target the next suitability measure.
Your ability to tap funding sources now and over a projected period of time in order to pay the newly negotiated credit card settlements.
A huge factor in determining whether settling with your banks is an appropriate option will be how quickly you will are able to pay the settlements. There are flexibilities with debt settlement in this regard that are missing from your other legitimate options such as credit counseling or chapter 13 bankruptcy. The flexibilities cannot be extended too far however. Over the years of working with consumers and assisting them to settle their debts, I long ago identified a settlement program should not be stretched beyond 18 months whenever possible. I am not saying you would not be successful in settling your debts using a longer time line, but after 18 months the risks associated with the debt settlement approach begin to become more problematic.
Your immediate needs and goals factor into choosing debt settlement.
Will you be able to budget your current and projected income, savings and cash flow to meet your basic needs and goals now and into the near future while meeting your time lines for settlement. Needs include your combined monthly bills and overhead if you had no credit card debt. Goals can be retirement, relocation, travel, reliable transportation etc…
Given the limited background information you shared as part of your question, I would encourage you find out if you can qualify for chapter 7 discharge of your unsecured debt. The reason I suggest this is because your only 2 sources of income you identified are SS and unemployment. The situation you describe you are in is not generally one that is consistent with choosing debt settlement as the optimal solution.
If you learn that you cannot qualify for chapter 7, or qualify, but would be forced to give up your home, or other valuable assets and items as part of a chapter 7 bankruptcy, then look to debt settlement as an alternative to bankruptcy.
You should schedule a consultation with a bankruptcy attorney local to you. You can go to the National Association of Consumer Bankruptcy Attorneys website here: www.nacba.org. Search using your zip code. Many bankruptcy attorneys offer no cost initial consultations. Call a few of them until you find one who does.
I also want to encourage you to reach out to us through the online consultation request form found here: Request a CRN Consultation, or by calling us toll free at 800-939-8357 and press 2. You will be able to speak with a CRN professional who works with our members and their creditors everyday.
The consults are provided at no cost to you and will help you determine more thoroughly the best method for you to gain relief from debt.
Readers who have a concern about whether debt settlement is an option worth considering given your specific circumstances are welcome to post in the comments below for feedback.