Settling debts in Wisconsin
Settling your debts in Wisconsin means, negotiating with your creditors to pay a lesser amount than what you owe
. Through debt settlement you may be able to save between 40% and 60% of your debt. You may do this yourself or get help from a settlement company. It depends on how persistent you can be and how much you can convince your creditor(s) to settle for.
Why would a creditor agree to settle?
Whether or not a creditor will agree to settle your debts will depend on:
How badly the creditor wants to be paid.
How long you have defaulted on the account.
The risk you pose to a creditor as someone who might file bankruptcy.
Creditors usually settle if they realize that sooner or later you may file bankruptcy. Creditors would like to get some money rather than not get anything at all and hence they agree on a settlement.
How does debt settlement work?
Wisconsin debt settlement program is no different from a settlement plan in any other state. The process begins with either you contacting your creditor or your creditor contacting you for a settlement. If you are settling your own dues, you may want to create a settlement fund just like the settlement companies create a settlement trust. You may save money in this fund till the time you are ready to pay off your dues. If a settlement company is helping you, it is required that you create a trust where you save money to pay your creditor.
When a settlement company works for you, they ask you to stop making any kind of payments to the creditor and save all the money that you can. Once you have saved enough, they send a representative to negotiate a settlement with the creditor. The time that you do not pay your creditor can be stressful since there is always a risk of creditors filing a law suit against you.
Once the creditor gives consent to the settlement, get it in writing. Make the payment and settle the account. After a settlement, your creditor must update your report as "Settled-in-full". It is different from a "Paid-in-full".
How is debt settlement different from debt consolidation?
Many of you may feel these two are same but the fact is that they aren't. The basic difference between consolidation and settlement are as follows:
Payment terms: When you are consolidating your debt, you pay a single amount to the consolidation company which then disburses the payment to each of your creditors. When you are settling a debt, it means that you are paying off on your debt (less money than what you owe) with one single payment.
Duration of the process: Consolidation may take approximately 5 years time. If a company tries to extend this term, there could be foul play. Debt settlement on the other hand takes only as much time to save the settlement amount and the time to convince the creditor.
Number of accounts: Consolidation is an option when you have too many accounts that you find difficult to handle. However, you may settle your debts even if it is for only one account.
If you want to take on the services of a debt settlement firm, you must be very careful about the company you choose. There are scam companies that may trick you out of your money. Do your research well. Speak with friends and family and ask them if they know of any reputable company.
Settling debts in Wisconsin
By: Jason Holmes
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