The Advantage of Debt Consolidation
To keep your debt from getting out of control, it’s crucial you work with your creditors but also understand the rules by which they play. By communicating regularly with them about current offers, you may be able to get their assistance through methods like reduced interest rates or lower annual fees. Of course this is much easier when your monthly debt payments are on time.
However, the game changes once you fall behind, and this necessitates a different strategy altogether. If you are facing past due balances, then read on to explore some different strategies to deal with your unsecured debt in 2016.
First, let’s begin with a reasonable perspective related to the lender and borrower relationship. If you borrowed money and promised repayment, it is your creditor’s obligation and responsibility to collect payment from you. If you become delinquent in paying credit card companies as previously agreed upon, they might rightfully become very aggressive in their collection strategies to protect their investment. While you may have not fallen behind intentionally, other borrowers often abuse lenders and make it harder for others to receive assistance when they have financial hardships. Your falling behind is likely not your fault, so now let’s look at how you can deal with resolving your debt burden.
To overcome your financial hardship and continue eliminating debt you have to learn the proper negotiation techniques. You can use any combination, or all of the following strategies in attempt to find financial freedom:
- LEAD THE CONVERSATION WITH BANKRUPTCY: Bankruptcy is the most common method for eliminating high amounts of accumulated debt, and creditors know this. Under Chapter 7 bankruptcy creditors will receive nothing. By mentioning that you are considering bankruptcy, creditors may likely become more compliant in considering alternative payment arrangements. Creditors are very aware that bankruptcy will completely eliminate debt and cancel their opportunity for repayment. When the creditor believes this is a real possibility, they may become more motivated to settle your debt for less money than originally owed to them.
- AIM TO REDUCE YOUR DEBT BALANCES: If you are far behind in your monthly payments, negotiations and settlement options may begin to occur. When you begin negotiating a settlement, the creditor will 0ften start at 70-80% of the total amount owed. It’s important to realize that every creditor has internal collection policies, and these amounts may vary. Obtaining a proper negotiation may take time. However, for this strategy to work, you need to have enough cash available to pay the settlement amount. This takes planning, or in most cases, a trusted third party to help you chart a realistic course of action to deal with each creditor according to their unique policies and your monthly budget.
- KNOW THE BIG PICTURE: Before you initiate the process of debt settlement or debt consolidation in San Diego, you must be fully aware of your financial situation, your state collection laws, and ultimately your personal financial objectives. Your goal through negotiations should be to eliminate as much debt as possible so you have more financial resources to care for your future.
Debt Consolidation Planning
Everyone goes through financial hardship at some point in his or her life. It’s normal, and it’s common. What is uncommon is for people to take the proactive step in sourcing an expert to help them early on, before things spin out of control. Instead, most people wait until the last possible moment to reach out for help, and unfortunately, the option they choose is often less desirable. So what can you do differently in this New Year? Plan ahead. How? By contacting a debt settlement law firm that is not only on your side, but has helped numerous people navigate the challenges of financial hurdles and red tape that you are facing right now. Our great rating at the California BBB speaks for how we care for our clients. Your next step begins with a complimentary, and private phone consultation that you can schedule right now. Call us today at 619-485-3045.
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About Brownstone Law Group – San Diego
This article has been reviewed and approved by Thomas A. Moore, managing attorney Brownstone Law Group, PC. California Bar # 148698. This article is for informational purposes only, does not provide legal or tax advice of any kind or form any type of attorney/client relationship. This article was published on January 13, 2016.