There are instances wherein you may need to borrow some money to finance a big purchase such as a house or a car, or to have sufficient capital for your business venture. However, there are also instances wherein you are trapped in a situation wherein you cannot fulfill the agreement you had with the lender because of various factors. This and other reasons may prompt you to hire a debt settlement company.
Substantial Debt
One of the primary reasons why you need to hire a debt settlement company is when you have a substantial amount of debt that you need to settle. In this case, through the services of the company, you will have the opportunity to reduce the amount you owe to an amount that you can already commit to paying. Usually, the reduction will not be taken from the principal amount that you owe, but rather, on the penalties and interests that you have incurred.
In case you owe anywhere near a couple of thousand dollars in debt, you may want to negotiate directly with your creditor instead. It is most likely for them to consider a repayment plan that you can stick to if you explain to them the reason why you have been behind your payments. It is a different story though if you owe a substantial amount that will lead to the creditor losing a huge amount of money as well. Rest assured that the debt settlement company will be able to help you settle the amount you owe into a reasonable amount.
New Terms and Conditions
Another reason why you may need the services of a debt settlement company is when your creditor implements new terms and conditions on your loan that you are not fully aware of. When you take out a loan, both you and the lender will need to agree on the principal amount that you can borrow, including the interest rate that you have to pay. You should also agree to a repayment plan, regardless of whether you need to pay a certain amount monthly, quarterly, or annually. When you both agree to the terms, both parties need to adhere to the contract agreement you have signed.
However, when the lender suddenly increases the interest rate you have to pay without prior notice, or when the repayment term is suddenly modified, then you may want to hire a debt settlement company to negotiate on your behalf. They are the best persons to represent you, citing the reasons why the new terms and conditions may be invalidated.
Lawsuits Are Filed
You will also tend to hire the services of a debt settlement company if your creditor is suing you for the debt that you owe. As a consumer, you may have legal protection, but as a creditor, they too are protected by the law. This means that by all means, they have the right to file a lawsuit against you. This is where it makes sense to hire the services of a debt settlement company because more often than not, they are represented by the best lawyers who will be able to help you with your case.
Possibility of Bankruptcy
Finally, when you are already thinking of the possibility of filing for bankruptcy, then hiring the services of a debt settlement company will also make sense. In this case, they will be able to help you avoid that path because the truth is filing for bankruptcy may be more expensive than you can think of. Aside from this, your bankruptcy record will also be valid for at least seven years, which means that borrowing money again in the future will prove to be quite challenging because of your financial record. With the help of a debt settlement company, not only will you be presented with options to avoid the bankruptcy path, but you will also have the chance to keep your credit score intact.
There are various reasons why you may want to hire a debt settlement company. Apart from a substantial debt that can be reduced with their services, you may also want to have new loan terms and conditions that are beneficial for both parties. When a lawsuit is filed by your creditor, as well as when you are looking into the possibility of filing for bankruptcy, then getting the services of a debt settlement company will also make sense. Just keep in mind that before you find yourself needing to hire a debt settlement company, you need to exert the extra effort to keep your finances in order.