How to Settle Your Debts in Idaho

Collect the Details About Your Debts 

Before you can determine whether you have any debts that can be settled effectively, you’ll need to gather some information about your accounts. Begin by going online to pull your free credit report. Your credit report is a great way to access your current debt information all in one place. You’ll also want to collect details about your debt by reviewing your most recent credit card statements and account statements for other unsecured debt. Pay close attention to the interest rates you are paying and current balances. Reviewing all of these documents will allow you to determine whether any of your accounts are good candidates for settlement. This process will also allow your credit counselor the ability to perceive your broader financial situation so that they can provide you with personalized guidance. 

Collect Details About Your Ability to Settle Your Debts

If you don’t immediately have funds available (or property you can sell) for settlement offers, you’ll need to determine whether you can fund offers using disposable income available to you after you’ve paid your expenses. Because of the way that debt settlement works, you’ll need to be able to fund a reasonable offer within 2-3 months of starting the process. If you don’t have the ability to fund installments in this way, you’ll need to consider alternative debt management and relief options.

You can determine whether you are able to settle your debts in installments by using a monthly budget of your income and expenses. Account for both fixed expenses that remain the same (like rent) and expenses that vary (like groceries). Also account for expenses that may occur soon but don’t occur monthly, like annual car registration. Now, determine whether you have any money left over after paying your expenses to make monthly debt settlement payments for a few months in a row until you can fund a lump sum offer. 

Learn About the Costs to Settle Your Debts in Idaho

It’s important to understand that you will incur costs when they use an Idaho debt settlement company. An Idaho debt settlement company will charge an upfront fee for their services and additional fees based on either the amount settled or the amount they were able to save you. The latter option is preferred because it provides the company with an incentive to get you the best deals. You’ll also incur fees and penalties on your delinquent accounts for as long as it takes to settle them. You’ll want to take these costs into consideration when weighing whether debt settlement is a good option for you.

Decide Whether to Work with an Idaho Debt Settlement Company

Maybe you have good computer skills, and are organized, and don’t mind negotiating with your creditors directly. If so, you’ll save money by not working with an Idaho debt settlement company. However, it’s important to be aware there are some risks of going it alone. For example, you won’t have access to anyone with experience to help you if you run into issues. You also risk getting bad information online. A debt settlement company will know what terms creditors typically accept. Plus, it will take an enormous amount of time and effort on your part to settle with your creditors, which may cost you more money in the long run. There is no single “right answer” to the question of whether you should take a DIY approach or work with a debt settlement company. Make whatever decision makes the most sense for you.  

Research Idaho Debt Settlement Companies

If you decide to work with an Idaho debt settlement company, be wary of those who make guarantees or tell you to stop talking to your creditors without explaining the risks associated with this approach. Many debt settlement company operations are actually scams, so it is a good idea to check with the Better Business Bureau or the Idaho consumer protection division in the attorney general’s office to see whether any complaints have been filed against a particular company you’re interested in working with. A trustworthy company is one that explains their services upfront, gives you a timeframe for results, and doesn’t charge you any fees before they settle your debts. Moreover, they will explain any impact on your credit score and other risks of debt settlement and they will keep you informed at every step in the process. 

How to Make Your Debt Settlement Work

Once you begin your debt settlement program, you’ll need to take steps to ensure its success. Unless you are making a single lump payment that you’re already prepared to pay, it will be important to stay current with any installment payment made into an escrow account per the terms of your agreement with a debt settlement company. Perhaps you get paid semi-monthly so you can schedule your debt settlement payments for the 16th of the month if you get paid on the 15th. A big consideration is not having your settlement payments fall on the same day your biggest monthly expense, like mortgage or rent, is due. As you complete your repayment term, you will want to have money set aside for emergencies so that unexpected payments don’t derail your ability to meet the terms of your plan. 

Note that there are some risks if you hold onto one or more credit cards while you try to settle your other cards with your creditors. For instance, you may have more than one credit card with the same bank. If so, be aware that the bank may close the account with the lower balance while you are in the debt settlement process. Also, if you keep using your credit cards, this can impact the debt negotiation and settlement offers you get. Additional risks include having your credit limit reduced on the cards you are trying to keep. Remember, you can discuss whether or not to keep one or more credit cards out of your debt settlement process to use for emergencies with your credit counselor and with an Idaho debt settlement company (if you’re working with one).   

Alternatives to Debt Settlement

Debt settlement is risky, so it’s important to consider whether or not a debt settlement is really your best option for debt relief before committing to this option. Idaho residents have other options available for managing debt that include debt consolidation loans, debt management plans and even filing for Chapter 7 bankruptcy; a credit counselor can discuss all of these options to help you determine which may fit your financial situation best.