If paying your debts in full is no longer a realistic option due to some sort of financial hardship, but you also want to do anything it takes to avoid having to file for bankruptcy, then debt settlement may be the right fit. The average American’s debt in 2020 included more than $5,300 in credit cards alone, plus nearly $16,500 in personal loans. These kinds of obligations can quickly become unpayable if your income gets interrupted or you face a financial emergency.
When you’re in this boat, something has caused you to fall behind on bills — whether you’re dealing with a costly divorce, recently lost your job or are facing unforeseen expenses bills. The more payments you miss over time, the more of a hit your credit score takes and the higher your interest charges climb. But before jumping straight into declaring bankruptcy, consider whether your creditors might be willing to negotiate a partial repayment with you in light of your financial hardship. This is what’s known as a “settlement.”
Programs like Credit Associates exist to assist clients through the settlement process, collecting a fee for their services on the back end for each resolved account. Here’s more on what it looks like to apply for and participate in this company’s program.
Qualifying for Credit Associates
You have to walk before you can run, as they say. In the debt settlement world, you have to apply before you can enroll in any given program. So, let’s take a look at what requirements you’d have to meet to be eligible for services from Credit Associates.
According to the Credit Associates reviews from Bills.com, here are key qualifications for the program:
The pathway to enrolling in Credit Associates is calling for a free consultation, during which you will discuss your financial situation. The factors above will determine whether you’re able to qualify.
What to Expect from the Debt Settlement Process
You will not have to pay any fees to get started with Credit Associates. In fact, collecting up-front fees is completely illegal for settlement companies.
How much can you expect to save through a debt relief company like this? There’s no exact amount because every case is different. However, an example of a settlement savings would be paying about $6,400 on a $10,000 original debt — a savings of about one-third. Again, there’s no “normal” settlement. It depends on what creditors will agree upon.
After you officially enroll with Credit Associates, the average amount of time it takes to work out a settlement is six to nine months. In the meantime, you’ll be socking away funds into a special savings account ahead of the negotiation. Settlement companies often advise ceasing payments to creditors altogether in the meantime because it gives you more leverage. This course of action, while it can strengthen the settlement, can damage your credit score and does not prevent lawsuits.
For each negotiated settlement, you will owe Credit Associates a percentage which will be withdrawn from the same special savings account. This process repeats until all your accounts have been addressed.
Knowing what to expect from a debt relief company like Credit Associates will help you prepare well, avoid surprises along the way and make the most of the journey.
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