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How to Settle Your Debts in Wyoming

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In a Nutshell

If the process of debt settlement may be a good fit for your situation, it’s important to learn how to get started with this process. Once you’ve weighed your options carefully, you’ll be able to make an informed decision regarding whether it is wise to settle your debts (and if so, which debts you should try to settle).

Written by Upsolve Team
Updated February 25, 2020


When you’re unexpectedly left without a paycheck or unexpected expenses render your budget temporarily meaningless, debt payments get left behind and credit scores suffer. It’s hard to manage mounting debt and your family’s needs at the same time. You can’t control everything in life, but there are resources available designed to help you get seemingly unmanageable finance back on track. For example, a debt settlement program may be able to help you, if you want to get out from under the weight of your current debts quickly. A Wyoming debt settlement company can handle the debt settlement process for you, or you can manage this process on your own.

Debt settlement allows you pay your creditors a significant portion of your debt balance in exchange for a partial forgiveness of your total amount owed. Once this transaction is complete, your account will be closed. Let’s say you owe a credit card company $150 for work boots. Using a debt settlement option, you or a Wyoming debt settlement company would call the creditor and inform them that you can only pay $100 because your employer went bankrupt and you’d like to settle the account. A “term settlement agreement” is made to put the details in writing. Your settlement offer of $100 to close the account is accepted. At that point, the outstanding balance of $50 is forgiven.

Debt settlement works because creditors have learned that receiving some money is better than not receiving any at all. This option works well for unsecured debt, but it doesn’t work well for secured debt, as creditors of secured debt usually prefer to repossess the collateral securing the debt in question if an individual defaults on their payment plan. 

Note that this option will not be in your best interest if maintaining an excellent credit score (or rapidly improving your score at any level) is important to you. Debt settlement will negatively affect your credit score, as it will be reported that you ultimately did not pay all that you owed the creditor(s) you settled with. 

Learn More Through Free Nonprofit Credit Counseling

You’ll want to start the debt relief process by scheduling a no-cost credit counseling session with an accredited nonprofit credit counselor. The counselor can give you detailed information on debt settlement specifically and debt relief options more generally. This initial meeting with a credit counselor to discuss your debt management options will be free. A nonprofit credit counselor can help you determine which type of money management program will work best for your situation uniquely. Debt settlement may be a viable option for you, but after speaking with a counselor, you may discover that a debt management plan, a consolidation loan, or even bankruptcy is a better solution for your unique circumstances. 

During your session, you and your nonprofit credit counselor will discuss your income, debt, expenses, and assets. Then, your counselor will work with you to develop an action plan so you can begin the process of managing and settling your debt and getting your finances back on track. You can find a counselor through the National Foundation for Credit Counseling (NFCC). NFCC member agencies are accredited and verified as reputable counseling agencies by the Council on Accreditation (COA)

How to Settle Your Debts in Wyoming

If the process of debt settlement may be a good fit for your situation, it’s important to learn how to get started with this process. Once you’ve weighed your options carefully, you’ll be able to make an informed decision regarding whether it is wise to settle your debts (and if so, which debts you should try to settle).


Collect the Details About Your Debts

To get a good look at the details of your total debt, you can start with the following actions:

  1. Collect all your bills.

  2. Make a list of creditors and creditor contact information.

  3. Write down the total debt owed and the total amount paid for each creditor.

  4. Write down the interest rate and the last payment date for each creditor.

  5. Collect any legal notices you’ve received.

  6. Get a recent copy of your credit report. (It’s free!) You can also call the FTC phone number dedicated to credit report requests at 1-877-322-8228 to get a free credit report. 

Sort your bills into the following categories so your credit counselor can get a clear picture of your financial situation:

  1. Government-related bills like state and federal student loans, IRS debt, or income tax.

  2. Medical bills 

  3. Secured debt like mortgages and vehicle loans.

  4. Unsecured debt like credit cards and personal loans.

  5. Living expenses (housing, utilities, food, and personal care, etc.).

Your list of income, expenses, and debt will serve as a starting point for your conversation with your credit counselor. Your counselor may be able to offer valuable insight into money management and debt management solutions that will suit your situation if they understand your finances as a whole. If your debt is mostly unsecured and you have money to pay a settlement, the credit counselor may declare that you are a good candidate for a Wyoming debt settlement program. But first, you must make sure you can afford a significant settlement payment.

Collect Details About Your Ability to Settle Your Debts

Before your counselor can make an effective action plan on your behalf, they will need a solid understanding of your income and asset situation. Collect the following documents before your session:

  • Paycheck stubs (eight weeks)

  • IRS documents

  • Workers’ compensation or unemployment

  • Child support or alimony

  • Pension payments or retirement income

  • Farm or ranch income

  • Lawsuit settlement income or inheritance 

  • Stocks, bonds, CDs or other investments

  • Bank statements

  • Vehicle titles 

  • Home and property ownership documents

If you receive federal benefits, such as Veterans’ benefits or Social Security Disability, look at the FTC’s list of income sources that debt collectors can’t touch and make your credit counselor aware of these sources of income as well. You’ll also want to bring a list of your family’s expenses to your session, as this information will also help your counselor to make a truly personalized action plan on your behalf. 

Learn About the Costs to Settle Your Debt in Wyoming

A Wyoming debt settlement company will charge fees on settled debts. Laws prohibit debt settlement companies from charging fees on debts that are not settled. Most companies use a percentage rate or a flat rate. Often, a percentage is applied to the amount of forgiven debt. This gives the debt settlement companies an incentive to save you money. It’s typical for debt settlement companies to charge15% to 25% on the debt that you didn’t have to pay. 

For example, pretend you bought some cattle for your ranch for $5000. A Wyoming debt settlement company charged you a 25% fee on the forgiven debt. The settlement company negotiated with the cattle company and agreed that you only had to pay $3000 and then the account would be closed. You saved $2000. But, you have to pay the debt settlement company a $500 fee (25% of $2000). Your total savings after paying the settlement company fee is therefore $1500. Debt settlement companies are required to tell you what the costs are before you contract their services, so ask questions and avoid companies that aren’t upfront with their fees.

You may also get stuck paying taxes on the canceled debt if you have over $600 in forgiven debt. You’ll have to report your canceled debt on IRS Form 1099-C. The tax consequences of a Wyoming debt settlement should be taken into consideration before you commit to this debt relief option.

Decide Whether to Work with a Wyoming Debt Settlement Company

When navigating the debt settlement process, you may opt to work with a debt settlement company. Debt settlement companies know the ropes of the debt industry. They’ve had time to build relationships with creditors. They have direct-call phone lists, strategies in place, and can whisk through the negotiation numbers and paperwork.

You can also settle the debt yourself by negotiating with your creditors directly. Using the DIY debt settlement option, make sure to track the negotiation dates, negotiation process, settlement agreements, creditor contact information, interest rates, payments, and do the math. This approach can be a lot of work, but it will save you from the risk of working with companies that are not reputable and will save you on settlement fees. 

Research Wyoming Debt Settlement Companies

Wyoming debt settlement companies must follow laws that cover the process of debt settlement, collection calls, collection agencies, contracts, and even client discussions. Always research a debt settlement company’s reputation before you sign a contract for services, as far too many for-profit debt settlement companies are fronts for scams.

You can find information related to debt settlement fraud on the Wyoming Attorney General’s Office and Federal Trade Commission website. The Consumer Financial Protection Bureau keeps track of complaints made against debt settlement companies, and they have a database you can use to research the complaint history tied to any company you’re interested in working with. 

The Federal Trade Commission has rules that say you do not have to pay a debt settlement company until after the company settles your debt. You may have to pay proportionately if you have more than one debt. For example, if you have ten debts and one is settled, the company can charge you a portion of the fee for settling that one debt. Debt settlement companies should be upfront with fees, services, and penalties. Companies should also tell you how much money to save before offers are made, and about certain escrow account details. If they don’t, look for a new company to partner with or negotiate with your creditors directly.

How to Make Your Debt Settlement Work 

Planning helps to ensure that your debt settlement process will be successful. If you’re paying a company in installments before offering the lump sum to your creditor(s), make sure to review dates on your bills, income statements, and bank account statements to determine the best time of the month to make payments. Avoid making payments during heavy expense weeks.

Even if you plan for the perfect payment date, you could still have an emergency. To make your debt settlement work, round up some funds for emergencies so you don’t have to stop payments on your plan. Prepare to have your credit lines closed once creditors are aware that you’re trying to settle your debts. It’s important to think ahead so that your efforts don’t fall short of your intentions. 

Alternatives to Debt Settlement

With a debt settlement program, you run the risk of stunted credit scores. Additionally, not all of your creditors may be willing to settle your debts. As a result, it’s important to weigh all of your debt management options before committing to debt settlement. A debt consolidation loan, a plan to manage your debt with monthly payments made to a credit counseling agency, or even bankruptcy, might be a better debt solution for you.

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Wyoming Debt Consolidation

A Wyoming debt consolidation loan is an option if you still have a favorable credit score. A debt consolidation loan involves securing a new line of credit to pay off existing debt balances. Ideally, the consolidation loan will have a lower interest rate than your current loans do.

If you use a Wyoming debt consolidation loan to pay off debts, your credit score will reflect debts paid in full. Paid in full status is good for your credit, but you’ll still have the new loan to pay and that will appear on your credit report. The debt settlement process requires creditors to report partial payments, but you won’t have a new loan to manage.

Wyoming Debt Management Plan

A debt management plan can help you pay off the full balance of your unsecured debt. If you can’t come up with a large chunk of money to pay off your debts, but you can make monthly payments, a Wyoming debt management plan (DMP) may be a viable debt relief alternative. With a Wyoming DMP, you’ll consolidate monthly payments from select unsecured debt into one account. You’ll make your monthly payment to a DMP administrator (who will then distribute those funds to your creditors per the terms of your plan) until your debt is paid in full. 

Wyoming Bankruptcy

If you don’t have much disposable income and your debt is overwhelming, consider filing for a Chapter 7 bankruptcy or a Chapter 13 bankruptcy. You can talk to a bankruptcy attorney to learn more about how Wyoming bankruptcy can erase debt and judgments. You can also file for Chapter 7 bankruptcy without an attorney and save on attorney fees. Upsolve has a fee-free bankruptcy DIY assistance program that may be able to help you file.



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