Queen of the Silicon Valley, San Jose is one of the most prosperous cities in the world. It’s also one of the most costly in which to live. According to the Economic Policy Institute, a family of four living in Santa Clara County needs an income of $129,092 a year to live comfortably.
This means many families are struggling to meet basic needs there.
If this describes your situation and you’ve hit the point at which you can no longer afford to make the minimum payments on your debts, you might be considering enrolling in one of the debt consolidation programs available to San Jose residents. If this is new territory for you, one form of debt consolidation is debt settlement, and here are some answers to questions about debt settlement San Jose residents need to ask before enrolling.
What Is Debt Relief?
In a debt settlement program, a company like Freedom Debt Relief will negotiate reduced payoff amounts with your creditors in exchange for one-time or recurring payments. With this carrot, debt settlement firms can often get fees and interest—as well as a portion of the principal loan amount—waived.
Before you get too excited though, you need to know this works primarily for unsecured debt like credit card bills, revolving charge accounts and medical obligations. Mortgages, car loans, past due child support, delinquent alimony and most government-backed student loans cannot be settled this way.
How Does Debt Relief Work?
A counselor will evaluate your situation during your initial consultation. Afterwards, a determination will be made as to whether or not settlement is a good approach for your circumstances. The best debt relief companies will explain all viable options—not just the ones they offer.
If you choose debt settlement, you’ll stop making payments to your lenders and deposit those funds into a third party held FDIC-insured escrow account over which you have complete control instead. As the cash in the fund accrues, the settlement company will begin negotiations with your creditors. When there is sufficient cash in the fund to satisfy a negotiated deal upon which you are in agreement, a disbursement will be made to pay off the creditor in full.
It’s important to note debt relief companies only pay debts in full and only when you agree to the settlement and authorize payment. The settlement company will bill you for its services after each debt is paid.
How Much Time is Involved?
The duration of the program varies according to the amount of debt you have, the time you need build up your payment fund and how long it takes to reach settlement agreements. Programs are completed within 24 to 48 months in most cases.
How Will My Credit Score Be Affected?
Your credit score will be lowered with debt settlement. Anyone telling you differently is wrong. With that said, if debt relief really is the best option for you, your credit score may have already been affected. However, you can begin rebuilding your credit rating yourself once you’ve completed the process.
It’s important to note debt relief and credit repair are two very different things.
What Will the Service Cost Me?
Federal law makes it illegal for firms to charge you for debt settlement services until a debt is resolved and paid off. Because of this, no reputable company will ask you to pay before a negotiated settlement is paid in full and confirmed. Further, they cannot force you to accept a deal. You’ll have full approval over the disposition of every settlement offer presented.
What Are the Hallmarks of a Legitimate Company?
Companies offering guarantees should be viewed with suspicion. Why? Because every situation is negotiated there can be no guarantees. Anybody touting a guarantee is probably inexperienced at best—and unscrupulous at worst.
Further, promises to make all of your debt go away are not genuine. Secured obligations cannot be resolved through debt relief, nor can child support, alimony or most student loans. Any attempt to sign you to a contract before reviewing your circumstances should be a red flag as well. The best debt relief firms are also associated with organizations such as the American Fair Credit Council.
Request a free debt evaluation to find out how we could help you:
- Resolve your debt faster
- Significantly reduce what you owe
- Make one low monthly program payment
Debt Relief for San Jose Residents
As wonderful as life is in the Bay Area, it’s hard to enjoy it if you’re experiencing debt. People looking to enrol in a Freedom Debt Relief program will find additional solutions such as credit counseling or debt consolidation in San Jose. While settlement is a viable approach, it isn’t the right one for everybody. The good news is the best solution for you is just a phone call away.
Find out how you can get on your way to being debt-free by taking advantage of a free consultation today. Call Freedom Debt Relief at 800-910-0065 . Experts are available seven days a week and the call is free.