When things get tougher in life and it becomes difficult to pay back your debts, debt settlement can be your best bet to get out of the debt trap. There are many debt settlement firms from where you can get expert help to make your debt repayment more affordable. Some of these may even start contacting you directly via debt settlement leads. Nevertheless, it makes sense to understand the various options you have before signing the contract with any of these firms.
Different types of debts may need different debt settlement techniques. What might work for one person may not work for another. It all depends on your financial situation and the circumstances you are in. However, if you are actively looking out for an answer, here are a few techniques you can choose from:
The Standard Debt Settlement Technique
In this technique your monthly requirements would be restructured to come up with standardized payments that seem attainable for you. This might work well if you are finding it difficult to pay back your debts because of a sudden increase in your monthly expenses. Once your requirements are analyzed and restructured, you will find it easier to pay back your debts in time.
The Extended Debt Settlement Technique
This is a technique that helps you extend the repayment period of your debt. As a result, there will be a significant decrease in the monthly payment that you make against your debt. While you may have to wait longer to become debt-free, you might also end up paying a lot of interest in the long run. This technique may work for you if there has been a permanent change in your financial situation.
The Graduated Debt Settlement Technique
Here your payment amounts vary depending upon your ability to manage your payments over time. If you are a self-employed individual and if your income varies from month to month, this could be your way of settling your debt. Not only will it make it easier for you to repay your debt, you will also be able to become debt-free as soon as you can.
The Prorated Debt Settlement Technique
In this technique the debt settlement firm creates metrics to come up with repayment amounts that are estimated based on your total income. Apart from wages, this technique also considers earnings from investments if any. If you have income from other sources apart from your wages, this should be a better way to make sure you get out of your debt trap.
The Lump sum Debt Settlement Technique
This technique is more or less like debt consolidation where in you borrow a lump sum amount from the debt settlement agency, pay back all your debts, and then start making the monthly payments to the debt settlement firm (your new lender) at a lower rate of interest. If you have taken too many debts at varying rates of interest and if you are finding it difficult to keep up with the schedule, this could be your way to make things easier.
The Credit Card Debt Settlement
As the name suggests, this technique would be for those individuals whose credit card payments have become absolutely unmanageable. The debt settlement firm that might have come to you via debt settlement leads, will come up with a strategic debt management plan depending upon the amount of debt due, and your financial requirements as well as abilities.
The Student Loan Debt Settlement
With higher education getting more and more expensive by the day, many students find themselves trapped in debts before they graduate from college. This technique helps such students afford their payments after considering their scores, career prospects, and the financial situation of their parents. In fact there are many firms that deal especially with student debt settlement and contact their prospects through student debt leads.
The Home Equity Debt Settlement
There is always the fear of losing your home when you are not able to pay back your home equity loan. However, a debt settlement firm can make things easier for you by negotiating with your lender and coming up with an option that seems easier to manage. You could even go in for a loan modification program if you can find a loan modification counselor through loan modification leads.
Professional help will always seem useful when it comes to settling debts. Explore your options, do your homework and make sure you take an informed decision that will free you from the debt trap.