Every year, millions feel like they are practically drowning in unpaid debts. Between the high and only increasing costs of housing, transportation, and other necessities, it can seem almost impossible to reach any financial high ground. With debt settlement, however, people can get some help and make their way back towards fiscal safety. While negotiating credit card debt during the settlement process, there can be much confusion about what actually happens to the money you owe and the interest and late fees gathered on your account. Liberty Debt Relief has the answers you need to be confident in your new debt relief plan.
How It Works
Before you can understand what happens to your interest rates and late fees on your debt accounts, it is important to know how debt settlement actually works. The debt relief consultant with whom you work will speak to you about your situation, budget, and ideal outcomes before starting debt settlement negotiations on your behalf. They will explain to your lenders all about your financial hardship, which will demonstrate to the lender why you are truly unable to make payments and may entice them to settle for a lower balance.
Compared to the average time it takes to pay off debt, which is usually more than 10 years, debt settlement is usually resolved pretty quickly. Most of the time, people complete their debt settlement programs in under five years.
Understanding Late Fees
Because negotiating credit card debt begins with your financial hardship and possible delinquent status, it is extremely likely that you have already received notifications and statements regarding late fees. These fees can range from just a few dollars to a hefty amount every month. It is also probable that the collection calls have already started and less and less of your monthly payments are going towards your premium.
In most cases, your debt consultant may be able to actually absolve these fees completely during the negotiations because your lender is more concerned about receiving a lump sum for the largest part of your debt rather than a few hundred dollars of fees.
Know Your Interest
Debt settlement negotiations go through many fine details regarding your finances. One of the many questions people often have first is what will happen to the interest rate on their outstanding balance. For many people, the account they are looking to settle has a rather high rate and, for every month that goes by without a payment, a few hundred dollars can be tacked onto their account. This is understandably scary and stressful, but that interest accrual may also be absolved during the negotiation process.
Similar to the situation with late fees, your debt relief consultant will also seek to dismiss interest charges on your account when it comes time to strike a deal. If you decide to pay off the settlement in a single payment, there is a good chance that will you only have to pay a fraction of the interest accrued throughout the negotiation process. Those who find it better for their situation to make monthly payments on the settlement will also see positive results, as your specialist will usually be able to significantly reduce the interest rate on the amount owed during the repayment terms. This will not only ensure you have lower monthly payments but also that you are subject to an interest rate you can actually afford.
Have Faith in the Situation
When it comes to negotiating credit card debt, it is always important to simply have faith in the process. So long as you rely on a reputable debt relief company such as Liberty Debt Relief, you can trust that the person you are working with has years of experience and will always do their best to make sure you get in the healthiest financial situation possible. Contact us today to meet with a consultant and start settling your debts so you can secure your finances for good.
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