We all make mistakes in life. Many of the mistakes we make come much earlier in life and are just a part of the learning process. Growing pains happen and because of these pains, we become wiser and can avoid these mistakes as we grow older.

For example, many people are financially irresponsible in their younger years. It happens to a lot of us, and the following example could happen to anybody.

Let’s say you just landed your first real job. Maybe it’s your first career – and you’re making money like never before. You decide you’re able to be able to afford a car payment.

At the dealership, you’re confident about your wages and you’ve got a decent amount of cash to put down. Your credit isn’t established but because you have a few thousand to put down the dealership offers you a “deal” on a brand new, zero mileage car.

The dealers tell you that the 19% APR isn’t bad for a first-timer, and their carefully-crafted language fails to alert you to the fact that your $40,000 car is going to cost you about $60,000 in the end. Now that you have a credit account under your belt, your score shot up quite a bit after you made your first payments.

A credit card company sends you an offer through the mail: a $2,500 limit on your first credit card. You’re pretty excited, considering you make a decent living, remember? You activate the card and use it to make your major purchases, but you pay it off each month.

It doesn’t take long until your credit score is up to about a 750 and you’re offered a card with a $20,000 limit. You jump on it, and a few weeks later you’re offered a Home Depot card – then a Costco card. You lease some furniture at Sears.

Everything goes well until you’re told they’re cutting your hours at work. You’re not fired or laid off completely like the rest of the staff, so you’re lucky in that regard. However, you’ll be making about 70% less than what you’re used to. After doing some calculating you’ll barely be able to make your house payment, car payment, and all your utility bills. That leaves about $2,000 to $4,000 a month in debt that’s going to pile up. And that’s exactly what it does.

The only way out is to contact a debt relief law firm and try to piece back your financial situation without filing for bankruptcy.

Debt Relief Law Firms and Debt Settlement Groups Is Popular Among All Age Groups

Debt relief law firms are one of the most popular ways to eliminate debts to regain financial stability. The process is relatively simple, as it involves negotiating with creditors for lower settlements than what they would normally charge.

This means that you will agree to pay less money towards settling your credit card or loan balances. In return, these creditors will drop their charges against you and forgive any outstanding balance owed to them. After all debts have been settled, you should be able to make more payments each month without incurring overdraft fees or late payment penalties.

Be Smart

The key idea behind this strategy is to negotiate better deals with your lenders so that you’ll end up paying off your debts at much cheaper rates and save yourself from interest charges over time. With no need to repay old loans, you could then use those funds instead to consolidate new ones, saving even more money along the way. You may also see an improvement in your overall credit score after some time has passed because you’re currently not accruing interest on unpaid accounts.

However, while there are many benefits associated with debt settlement, it’s important to note that there are also certain drawbacks that come with this type of arrangement.

For instance, if you stop making monthly payments altogether — which happens when you stop repaying existing debts — your credit rating will suffer, and you could lose access to future lines of credit. Also, since your lender isn’t getting paid back enough to cover its costs, he/she might start charging higher fees as compensation.

If you don’t know how to handle such situations, it’s best to consult a professional before acting. A solid debt management plan requires careful planning and attention to detail, including good advice from debt relief law firms. The right Athens, GA debt relief law firm can make sure you’re on the right track.

Debt Relief Agency or Debt Relief Law Firm?

For people who want to explore different options available today, several reputable companies are offering this service across various regions throughout the United States. One example is TransUnion Debt Solutions Inc., which operates nationwide and offers affordable packages tailored specifically to individual needs. This is the alternative to a debt relief law firm.

As part of its comprehensive services, TransUnion will work closely with you throughout the entire debt negotiation process. Its goal is to educate you on consumer protection issues and other legal matters about debt settlement. It also provides guidance regarding tax liabilities and reporting requirements, plus assistance with bankruptcy proceedings. They essentially contain the same knowledge as a debt relief law firm.

While the specifics vary among providers, essentially the same principles apply when trying to reach a compromise between you and your lenders. Most programs offer three main phases: pre-negotiation phase; negotiation phase; post-settlement phase. And although every company works differently depending on specific circumstances, experts suggest following similar guidelines during each stage.

You can always handle the situation manually. Here’s a basic rundown of the steps involved in the typical debt settlement procedure taken on individually:

 

Stages of the Debt Settlement

You’ll have to come up with a situation that’s beneficial for you and the credit company.

Pre-Negotiation Phase

During this period, you receive written letters from your creditors stating the amounts for repayment. These documents include information about past collections efforts made by them, as well as their current lending policies and relevant laws. They typically provide details on how long you’ve had delinquent accounts and whether you qualify for special consideration based on the number of previous payments already sent.

Once you understand everything included in creditor correspondence, you can prepare a response detailing your position. While doing so, remember that you don’t necessarily need to present evidence showing your inability to pay back old obligations. Instead, try emphasizing personal hardships like medical bills or a job loss that were caused by natural disasters, unemployment, divorce, etc. Creditors usually respond favorably to such arguments because they recognize that hardship isn’t always avoidable. Keep in mind that you shouldn’t lie either, though. Lying about income earned or assets owned can cause serious problems later down the road.

After receiving creditor responses, review them thoroughly once again. Don’t rely solely on verbal communications, especially concerning sensitive topics like your family situation or health concerns. Write down whatever comes to mind immediately after reading these documents to ensure accurate memory recall later. Now that you’ve compiled all relevant data, proceed to the next step.

Once again, this is when a debt relief law firm would benefit you tenfold.

Negotiation Phase

Once you have completed preliminary research into potential solutions, contact your creditors directly via phone calls, faxes, emails, or mailings. Be prepared to discuss terms of repayment and ask questions about upcoming deadlines. Listen carefully and keep track of dates, numbers, and conversations. Try to set regular meetings (or “conversations”) with representatives from both parties to stay informed about progress. Make sure you record every conversation, too.

You should also consider meeting face-to-face or having video conferences whenever possible. Such arrangements allow for greater transparency and enable everyone to clearly communicate their thoughts, feelings, and opinions. However, unless necessary, refrain from asking others to act on your behalf (i.e., friends) or sharing confidential info with anyone else outside of the negotiations themselves. Trustworthy individuals who aren’t privy to private discussions mustn’t take advantage of this trust, nor should they share sensitive information with third parties.

Post-Settlement Phase

At this point, it becomes critical that you constantly make your payments and stick to your agreement. Any discounted figures that they agreed to adjust your account to will be null and void if you fail to hold up our end of the bargain.

For example, if you owed a company $5,000 initially but you had the figure reduced to $2,500 because you committed to paying the account off in a certain amount of time – not making payments means they can reinstate the old amount plus interest.

Just because you’ve reached an agreement at this point doesn’t mean that a negotiation later down the road can’t be even more beneficial to you. What do we mean by this?

Let’s say you owed $8,000 and had it knocked down to $5,000. You’ve been making consistent payments and you’re down to $3,000 owed.

However, you come across a lump sum of money through whatever avenue – now you have some   $1,500.

Contact an Experienced Debt Settlement Lawyer in Athens, GA About Debt Settlement

Going through a debt settlement company can seem to make things much easier for you. Normally these companies will pay off your amounts owed, often for a highly discounted rate. This is a practice known as debt buying. Then they turn around and charge you more than what they paid for our debt and offer you small monthly payments you can manage. What about a debt relief law firm in Athens, GA?

Debt settlement law firms could be the most efficient option depending on your situation. They simply help you negotiate with your creditors and can often have entire accounts charged off with no money at all.

If you’re ready to get serious about your finances, contact Morgan and Morgan to take control of your expenses and credit accounts.