Tips for Qualifying for Debt Settlement

For consumers struggling with high levels of debt, finding a debt relief solution to the can be a very difficult process. Many consumers believe that as long as they owe a lot of money to a number of creditors, any credit counseling, debt settlement, or debt consolidation company will be willing to help them out. Unfortunately, in the debt settlement industry, this is not the case. For starters, the majority of companies set a minimum on the amount of debt they are willing to handle before they enroll any potential clients in their program. In addition, on top of the minimum set on the total debt owed, a lot of companies also have a minimum per account policy. Regarding small accounts, companies feel that they are not worth taking on because the potential to save the client a large percentage of what they owe isn’t possible because the balance is not high enough. And finally, companies who pride themselves in ethical business practices will first pass your information down to an underwriter to properly assess whether or not you truly are a good candidate for the program. The following is a brief list of things you can do to ensure your chances of qualifying for a debt settlement program are high.

1) Avoid making large balance transfers in the months leading up to potential qualification into a debt settlement company. This type of activity appears suspicious in the eyes of the creditor and hurts the negotiation process with the settlement company.
2) Don’t take out large cash advances in the months leading up to potential qualification into a debt settlement company. If you take out cash advances while you have large amounts of outstanding debt, creditors are likely to ask, “Why is this person borrowing money if they owe so much. They should be paying off their debts!” This, also, has a detrimental effect on the negotiations process and you most likely will not qualify for a settlement program.
3) Make sure you have sufficient income for a monthly payment. While the monthly payments that most settlement companies require for a minimum are typically up to 50% less than your monthly payments to your creditors, it is still necessary for any consumer to know they can afford a program to help their financial situation. If you have no access to income, bankruptcy may be a better option, particularly if your outstanding debts are extremely high.
4) Be honest about your financial situation. Keep in mind, the more accurate the numbers and information you pass on to a company are, in turn the more accurate estimates they will be able to give you on how much they may be able to save and how much your monthly payment will amount to. There is no need to hide information from a company because you don’t want to be embarrassed or you are in denial of your current standing. Remember, the employees of any debt relief company handle thousands of situations just like yours every week- there are no surprises. Be honest with them, and you will receive a more accurate portrayal of how much money they can save you.