DEBT SETTLEMENT FAQS: WHAT YOU NEED TO KNOW ABOUT SETTLING DEBT WITH CREDITORS (PT. 1)
The average American household has more than $15,600 in credit card debt, according to the U.S. Federal Reserve. While this amount of credit card debt can be enough to make money tight around a household, the situation can get financially dire when such debt is compounded by issues like persistent unemployment, massive mortgage/medical/other debt and/or when a divorce may be impending.
All of this can be grim news, but it’s important for consumers facing such significant debt to realize that:
They have options for resolving these debt issues.
Debt settlement can be a viable option when people aren’t ready to file for bankruptcy.
To highlight what debt settlement involves and what its outcomes can be, this blog series will be focused on answering some common debt settlement FAQs. While the answers herein are purposely general to make them as widely applicable as possible, contact the trusted Denver bankruptcy attorneys at Garcia & Gonzales, P.C. when you are ready for experienced, professional help pursuing your best debt relief options.
Helpful Debt Settlement FAQs
Q – How does debt settlement work?
A – With debt settlement programs, consumers usually hire a company to help them negotiate a lower lump sum payment on their outstanding debt. Generally, these programs work by having consumers deposit money into a saving account on a monthly basis and then using these funds to satisfy creditors once enough has been saved.
Q – Should I stop making payments on my debt after signing up for debt settlement programs?
A – Although debt settlement companies may tell you to stop paying on your debts, you should be aware that there WILL be consequences to this – and that these consequences may eclipse the “services” you receive from these companies.
In particular, the consequences of stopping payments on your outstanding debts are:
Penalties and possible increases in interest rates, which will increase the total amount you end up owing
Further damage to your credit (as your creditors may report your missed payments to the credit bureaus).
Denver Metro Area Bankruptcy Attorneys at Garcia & Gonzales, P.C.
Are you looking for real relief from serious debt? If so, you can trust the experienced Denver bankruptcy attorneys at Garcia & Gonzales, P.C. to provide you with experienced help, honest answers and the highest quality legal services. Serving individuals, families and businesses throughout Denver and Colorado since 1977, our attorneys can always be relied on to clearly explain your best options for resolving your debt issues and working diligently to help you pursue them.