What Needs to Happen Before Settling Your Debt

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There is no doubt that money is a stressful topic, especially when it seems that there is not enough in your pockets and too much in your outstanding balances. When debt seems to take over, many people find that settling that debt is their best option. While it very well may help countless people, it is crucial to understand what needs to happen before you choose to settle your debt with a company like Liberty Debt Relief.

Understand “Standard Qualifications”

The first thing to understand about debt settlement programs is that they are not for everybody. Some people begin looking at such programs when they are only in slight debt, meaning that they owe only a few hundred or less than $5,000. While those may be tough situations, they are not typically financially devastating and you can usually easily maneuver your way out in time. Negotiations are best for people who are in thousands of dollars of debt, usually as a result of a sudden hardship, such as divorce or being laid off from work.

If that sounds like your situation, it is essential to understand how a company creates strategies for debt negotiations and what they look for in successful cases. Some may look for clients to be in specific kinds of debt or within a certain limit of debt, while other are looking for people in specific kinds of financial hardship, such as rampant medical expenses. The general rule of thumb, however, is that debt settlement is best for people who desperately need help and who want to forego filing for bankruptcy.

Lay Out Your Finances

To truly know how a debt settlement company or expert does their due diligence in making debt negotiation work for you, start by taking a look at your own finances. It is always crucial to understand where you are at so you know exactly what you need and what you are potentially getting yourself into. The best way to do this is to write out all of your debts by type, amount, and interest rates and compare it to another written document that lists how much you earn every month and how much you spend on bills, debt, essentials, non-essentials, and savings.

Comparing this information will help you determine if you simply have a spending issue or if you truly do need financial assistance. If assistance is looking like the best option, try to narrow down how much you could realistically spend on paying off your debts every month without going into further debt with your bills or other parts of your budget. This number will be useful when negotiating with your lenders so that you can hopefully reach an agreement that suits both of your needs. In many cases, companies like Liberty Debt Relief can negotiate the new amount to about 50 percent of the original debt, but you also need to prepare for other potential outcomes.

Know What to Expect

Before you choose to sign onto a debt settlement plan, there are a lot of fine details you absolutely must know and understand. First of all, settling debt is a process that usually takes between two and four years. The problem does not simply disappear once negotiations are over, either. While you will likely not have to make multiple payments to various companies every month anymore, you will still be required to make a single monthly payment on time until the debt is paid off. Failure to stick to a designated payment plan can put you at a huge risk of getting into even more debt because the company can then break the contract and charge you an even higher interest rate than what you began with.

Talk to a Reputable Expert

The best way to find answers to all your questions, including “how does debt negotiation work” and “how will it impact my financial future”, talk to a trusted Liberty Debt Relief consultant today. They will sit down with you one-on-one to find out what you need to better your financial circumstances and how you can do so as quickly and efficiently as possible.

Contact Liberty Debt Relief today to take a leap forward into a bright financial future.

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