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How to Settle Your Debts in Missouri

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In a Nutshell

If you’re interested in learning more about settling your debts, read on! You’ll learn about the debt settlement process, debt settlement companies, and alternatives to debt settlement in the sections below.

Written by Upsolve Team
Updated March 18, 2020

If you’re behind on your debt payments and you’re starting to dread looking at your caller ID because nearly every time the phone rings, it’s a reminder to pay your bills, it may be time to consider the many debt-relief options that are available to you. Particularly if the majority of your debt is unsecured debt, there are many tools and services available to help you manage it and regain strong financial footing. One of the most common debt-relief options available involves participating in the Missouri debt settlement process. A debt settlement company can help you get back on your feet and stop harassing collection calls. Most Americans who are riddled with credit card debt, medical bills, and other personal debt struggle to afford a basic standard of living. Falling behind and missing payments can be a very stressful situation. Being harassed by the collection agencies and debt collectors can be truly overwhelming. It’s time to put a stop to this stressor. Debt settlement, or an alternative debt management option, can help you to reset your finances. 

A Missouri debt settlement company can help you to close out your accounts by helping you to pay your creditors less than the full balance owed. Essentially, debt settlement allows you to benefit from partial debt forgiveness after you pay off a significant fraction of your balanced owed in one lump sum or 2-3 installment payments. Therefore, either you or your debt settlement company will negotiate with your creditors to pay off debt on delinquent, unsecured debt and personal loans over a short period of time. Keep in mind that debt settlement is only a good option if you have unsecured debt like credit cards and personal loans. If you have secured debt like mortgage payments or government-related debt like federal student loans, you will need to look into alternative debt-relief options. 

Learn More Through Free Nonprofit Credit Counseling 

Credit counseling agencies employ professionals trained to help people who are struggling with debt. Before signing up with a debt settlement company, you should arrange to have a free, no-obligation consultation with a credit counselor. Credit counselors can help you navigate your finances and give you personalized recommendations related to different debt relief options designed to fit your financial needs. 

When you sign up with a credit counseling agency for a free credit counseling session, you will meet with a credit counselor who will review all of your financials and evaluate the causes of your financial hardship. Your credit counselor will then give you a plan to help get you out of debt and help you improve your finances. Both you and your counselor will talk about your financial goals and what you will need to do to meet them. Some people are not good candidates for debt settlement and a credit counselor can tell you if debt settlement probably isn’t right for you. 

How to Settle Your Debts in Missouri 

If you’re interested in learning more about settling your debts, read on! You’ll learn about the debt settlement process, debt settlement companies, and alternatives to debt settlement in the sections below.

Collect Details About Your debts 

To start off, you will need to gather information about each of your debts. Even if you don’t plan to include your debts into your settlement program, you will still want to know what they are so you know how much disposable income you have to offer your creditors. Additionally, some creditors will want a complete picture of your current financial situation before they’ll agree to a debt settlement plan. They will want to know what your financial hardship is and why they should agree to a settlement with you. If they know you have other outstanding debt, they may be more inclined to settle. 

Having the most accurate information available is essential. Consider pulling a free copy of your credit report and review all of the debts listed. To ensure accuracy, pull a credit report from each of the three major credit bureaus. Each credit report will have detailed information about your balance, interest rate, and monthly payment. As you go through this information, make a list of what debts are secured vs unsecured so you know exactly what debts can potentially be settled.

Collect details about your ability to settle your debts 

You will want to keep handy all of your account balances, interest rates, and monthly payment information so you (and any debt settlement company you may choose to work with) can more easily come up with a workable plan of action based on your unique financial situation.

If you are living paycheck to paycheck and don’t have any disposable income left over to offer your creditors, then debt settlement will not be a good option for you. If you do have access to “extra” income or you have assets you can sell to fund settlement offers, you will need to decide if you will be offering lump-sum settlements to your creditors or whether you’ll be working with a debt settlement company to pay short-term installments before making offers. 

If you’re interested in making installment payments, go over your monthly income and expenses and calculate how much disposable income you have left over after paying your bills. To calculate your expenses you can look at your bank statements or create a monthly budget sheet. After estimating your income and your expenses, determine what income you have left over to set aside for settlements. Keep in mind that you’ll generally only be able to make 2-3 installment payments before making a settlement offer. If your disposable income is too low to make this arrangement work, you may be better served by a debt management alternative. 

Learn About the Costs to Settle Your Debts in Missouri 

Debt settlement companies have different ways they charge fees for their services. Before signing up with any particular company, they must tell you what fees you will need to pay and when you will be charged. Some debt settlement companies will charge a percentage of what they save you while others charge a fee on the total amount being negotiated. The best option is the first one because it gives them more of an incentive to save you money. 

If you decide to hire a debt settlement company, a settlement fund will likely be set up for you to make your payments. After a debt is negotiated, the funds in the escrow account will be used to make settlements to your creditors. Keep in mind that creditors won’t be willing to negotiate with you until your behind on your payments. As you continue to put money into your account, your creditors won’t be getting paid. The longer they go without getting paid, the more your credit score will go down and the greater the risk you have of creditors file lawsuits against you. This is one of the primary reasons why this debt relief option is not the best fit for everyone’s financial situation. 

Decide Whether to Work with a Missouri Debt Settlement Company 

Using a Missouri debt settlement company has many benefits. They can negotiate settlements for you and know how to speak to creditors since they do this every day. However, if you are well organized and have the time to negotiate settlements yourself, you can save a lot of money in fees. Negotiating on your own can put you in charge of your financial situation. However, the process can be time consuming. so if you don’t have time to put aside for calls then it is probably a better idea to work with a company that can negotiate on your behalf. 

Research Missouri Debt Settlement Companies 

Laws require debt settlement companies to divulge specific information about how they operate. A debt settlement company must be open and honest about their prices, terms, and the time it generally takes to see results. While your creditors are not being paid, a debt settlement company has an obligation to tell you about how your credit score will be negatively impacted and what costs, fees and penalties will continue to accrue until your settlement process is complete. They also must explain to you that as your balance goes unpaid, you will face the risk of having lawsuits filed in court. 

Finally, a debt relief company also must inform you that any money placed into your escrow account to settle debts is your money. This means that you can take the money out without facing any penalty. If your debt settlement company doesn’t look into your finances and uses harsh sales tactics to get you to sign up, run the other way. No debt settlement company should make any guarantees that they will be able to reach settlements for you, as no creditor is obligated to settle your debt. Moreover, debt settlement companies that charge fees before performing any service can be fined. 

To ensure you find a qualified debt settlement company to work with, you can start by checking the rating of any company that interests you on the Better Business Bureau website. To see complaints that have been filed against companies in your area, you can check the Missouri Attorney General’s website or the division of consumer complaints.

How to Make Your Debt Settlement Work 

If you’re making installment plans, ensuring that you stay on top of your monthly payments is the only way to make sure the process will work for you. Make sure to schedule your settlement payments on a day that you don’t have other large bills due. If you end up falling behind on your settlement payments this can be disastrous. Your full account balance may again become due and all the efforts you made to settle your debt will have come to nothing. 

Alternatives to Debt Settlement 

A Missouri debt settlement is not the right debt relief option for many people. Don’t let any debt settlement company talk you into signing up with them if you really can’t afford to settle your debt. Other financial management options such as debt consolidation, bankruptcy and debt management plans are also great ways to help you get your personal finances back on track. 

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Missouri Debt Consolidation 

A Missouri debt consolidation loan allows individuals to combine their high interest unsecured debt into a single account, which is paid monthly. This process is accomplished by using a new line of credit as a balance transfer to pay your existing debts. A Missouri debt consolidation loan may save you money by reducing interest and minimizing the risk that you’ll make multiple late payments every month on numerous, unconsolidated accounts. You will need a high credit score to be approved for a debt consolidation loan. If you don’t have a high credit score, consider consolidating your debt via a debt management plan instead. 

Missouri Debt Management Plan 

A Missouri debt management plan allows your credit counselor to negotiate directly with your creditors to come up with a repayment plan that you both agree on. You may be able to get your interest rates lowered and fees waived with this process. Essentially, you’ll make one monthly payment to your credit counseling agency, which will then distribute it to your creditors. 

Missouri Bankruptcy 

By declaring bankruptcy, you can get a fresh start. Filing for a Missouri bankruptcy does not mean you will lose your most important assets, as there are protections in place that can allow you to keep these items. A bankruptcy lawyer can work with you to determine if you qualify for Chapter 7 or Chapter 13 bankruptcy

Upsolve also can help you file bankruptcy and gain a fresh start. Each month, Upsolve helps hundreds of people file bankruptcy for free. If you want an attorney to help you with this process, Upsolve can recommend great bankruptcy lawyers to help you explore your options.

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