Debt relief can come in many different forms. One of the options is debt settlement. Debt settlement is a process where you work with a third-party service provider who will negotiate with your creditors to find a lower payment that will pay off your debt in full. While this sounds like a good deal, there are some downsides to debt settlement.
One of the biggest downsides to debt settlement often comes from the companies providing the service. From bad customer service to unreasonable fees, debt settlement companies can make you feel trapped inside their settlement schemes.
So what happens if you join a debt settlement and realize there are issues with the company you are working with? Should you keep working with them? Is it hard to get in touch with a representative? It may be time to consider a consolidation of settlements.
What Is Consolidation of Settlements?
A consolidation of settlements can help you get out of business with difficult or shady debt settlement companies. Let’s say that you have five different lines of credit or debt that you are wanting to settle and then enrolled those five debts into a debt settlement program. If you went through the debt settlement process for one of those debts, but were dissatisfied with either the fees associated with the service or upset with the customer service, you may want to consider consolidating your settlements.
But what does that look like? Basically, a consolidation of settlements would involve you finding another debt settlement company to work with based on their better fees and customer service reviews and then consolidating your remaining debt lines into the new company. If the one line of debt that you began with is still in the process of being settled, you have the option to either move that to the new company or allow the initial company to finish the work that they began.
Why Is Consolidation of Settlements Important To Understand?
While this option may seem a little complicated, it is important to understand how it works and why it will be helpful for you. A few of the benefits include:
Lower Cost
The entire goal of debt settlement is to pay a lower amount for the debt that you owe. Typically, a debt settlement company can negotiate with your creditor to a payment that is anywhere between 10-50% less than what you began with. It’s important to realize that you will still have to pay fees to the company that works on your behalf.
Unfortunately, the fees tend to be a percentage of the total amount of debt you began with. Typically, the percentage falls somewhere between 18-20% (we work with one company that often charges 15-18% which we love), though there are some companies that can end up charging more like 25%. This can become an issue if the debt settlement company charges you more than the percent they get forgiven.
Outrageous charges can cause you to pay more than what you would have without even beginning a debt settlement. A consolidation of settlements can help you find a company that has a lower cost. This can end up saving you money in the long run.
Better Customer Service
Did you feel well taken care of when you first started talking with your first debt settlement company? Were they always quick to respond to you and were always accommodating? Did something change once you began working with them? Sometimes debt settlement companies are very responsive to their potential clients and then not be as available once the client is confirmed.
If this has been your experience with your current company, it may be worth it to look into other debt settlement companies to see if you would have a better experience working with someone else. Make sure you check out the new debt settlement company’s customer service reviews. This will help you get an idea of what kind of company they are. Better customer service could help the debt settlement process feel easier and more attainable.
When Should You Consider Consolidation?
So at what point should you consider consolidation of settlements? It can be a difficult decision to make, especially depending on where you are at in the debt settlement process. Here are just a few things you should consider if you are thinking about consolidation of settlements:
Fees
Were you shocked to see the percentage your current debt settlement company decided to charge you? Are you looking at paying 20% or even 25% of your total debt payment? Then you may want to consider consolidating your settlement. You can often find debt settlement companies that will charge 18% or even less. Researching your options can help you save potentially thousands of dollars in fees.
Length of Time In Current Program
You may want to consider the length of time that you have been in your current program. If you are close to completing the settlement, it may not be worth it to stop the entire process and find a new company. However, if you are just getting started and are already unhappy with the service being provided, you still have time to research other debt settlement companies you could work with.
How Many Active Settlements
If you have multiple settlements with one company, you may want to think about splitting the various cases between multiple companies. If you already have one active settlement, but other settlements are waiting, it may be worth moving over the remaining settlements to save money overall.
Do You Qualify To Consolidate Your Settlements?
One of the most important things to consider when consolidating is whether you qualify. As you may have a portfolio of creditors that a lower-cost debt settlement company may not take, you should consider whether you qualify for consolidation. This can be a tedious process and possibly difficult to determine. Luckily, we have something that can make this much easier: our consolidation of settlements qualification calculator.
Take the following calculator for us to review your data specifically to see whether you qualify
Conclusion
If you are hoping for a better experience in debt settlement, you may want to try consolidating your settlements. Consolidating your settlements from one debt settlement company to another can ensure that you are getting the best price and customer service you can.
If you are interested in trying to consolidate your settlements, first take our calculator to see if you might qualify. If you would like more information, or you want to talk to someone about the consolidation of settlements, then feel free to reach out! We would love to talk to you about your options.
