How to Settle Your Debts in North Dakota

Collect The Details About Your Debts 

You may need to show your creditors why you can’t be expected to pay your debts in full any time soon. For example, if you had a medical condition that caused you to fall behind, you may want to get documentation that backs up your claim. It is always helpful to have a copy of all of your debts and income so that you can give the creditor a full financial picture of your situation. Knowing why you fell behind and understanding your current financial situation will put you at a better stance for purposes of negotiations. If you do not have your most recent statements from your creditors, you can pull a free credit report online. Your credit report will also let you know if any of your past due accounts have been purchased by debt collection agencies. If so, you’ll need to negotiate with these agencies directly. Another reason why you’ll want to pull all of your recent account statements is that analyzing them will better help you determine which debts are good candidates for settlement and which may need to be approached in a different way.

Collect Details About Your Ability to Settle Your Debts

To start the debt settlement process, you will need to collect these documents: 

• Copies of your newest account statements (for all debts, not just those you hope to settle) 

• Two months of your income records

• A credit report 

• Any records indicating your hardship and why you fell behind on your bills (ie. medical, loss of income, layoff, etc.) 

Next, you will want to go over your income and expenses with a fine-tooth comb. Figure out what you can and can’t afford, so that you can offer each creditor a realistic settlement amount. Don’t ever cash out your retirement to pay your debts back. Debt settlement is not right for everyone and it should not be entered into lightly. While debt settlement can help individuals get out of debt, this process can also be harmful if you are not in a position to complete it successfully. Debt settlement should only be considered if you are behind on your accounts, have some money to offer your creditors (or property to sell) to fund settlements within 2-3 months’ time, and the debts that you hope to settle are unsecured. 

Before you can settle your debts, your accounts must be delinquent. If you are up to date on your accounts, your creditors will presume you have the finances to pay them back and won’t begin settlement negotiations with you. Keep in mind, while your accounts are going into default this impacts your credit score and you’ll accrue fees. So, if you have a good credit score, debt settlement may not be the best option for you, even if you can afford lump sum payments at this time.

Learn About The Costs to Settle Your Debts In North Dakota 

If you have decided to hire a North Dakota debt settlement company to help you settle your debts, you may be charged high fees. Always inquire about how a North Dakota debt settlement company’s fee structure works before agreeing to work with them. There are two ways they can charge you: either by charging you a percentage based on the total debt (this option is usually more expensive) or by charging you a percentage based on the total savings. The latter is less expensive and provides more of an incentive for debt settlement companies to offer better settlements. Keep in mind that even if you don’t work with a debt settlement company, you will accrue fees and penalties for as long as it takes to settle your accounts. Various debt management alternatives can stop fees almost instantly, so this is a reality worthy of consideration as you weigh your options. 

Decide Whether to Work with a North Dakota Debt Settlement Company

Working with a debt settlement company is not a good option for everyone. If you decide not to have a debt settlement company negotiate settlements offers on your behalf, make sure that you are: 

• Organized.

• Not too busy to get on the phone. 

• Able to stay calm. 

• Able to read over an agreement in detail. 

Remember you don’t have to hire a North Dakota debt settlement company, so don’t let anyone tell you otherwise. Doing it yourself will put you in complete control of everything. You will be able to settle with lenders who won’t work with North Dakota debt settlement companies. However, hiring a debt settlement company has advantages because they have experience with this process and may have inside knowledge on how to get the best settlements. Also, not everyone is in a position to handle direct creditor negotiations on their own. Please take whichever approach is best for you and your unique circumstances. 

Research North Dakota Debt Settlement Companies

Unfortunately, there are many debt settlement programs that operate as scams. Don’t work with any debt settlement company without doing some research first. Before signing up with a North Dakota debt settlement company, consider these red flags:

• They promise you the world to get you to sign up without reviewing your specific situation. 

• They are aggressive with you. 

• They tell you that bankruptcy is not a good option for you. 

Having questions prepared to ask any given North Dakota debt settlement company is a good way to ensure that you are hiring a company you can trust. Here is a short list of questions you should consider asking before signing up: 

• What are the price and terms of the services you will be getting? 

• How long will it take to get results (how many days or weeks before the company will make an offer to each creditor for a settlement)?

• How will your credit will be affected if you stop paying your creditors? 

To make sure your North Dakota debt settlement company is reputable, so you don’t fall victim to a scam, you can check out the North Dakota’s attorney general website, and consumer protection division in North Dakota. Another good place to see how companies have been rated is the Better Business Bureau website. 

How to Make Your Debt Settlement Work

To make sure your North Dakota debt settlement program will ultimately be successful, you will want to make sure that you can afford either your lump sum or installment payments. Make sure your settlement payment(s) falls on a day where you don’t have other large bills due. You will also need to put money away for any emergencies that you may run into. Many people who don’t have money set aside for emergencies end up in the same place they were in before starting their debt settlement plan because once an emergency arises, they need immediate funds to cover the emergency leaving no money to cover settlement payments. Thus, it is important to have extra funds set aside so that you don’t fall behind on your monthly settlement payments.

Also, don’t forget about bills that may only come up once a year or every six months. Forgetting to include these bills when you calculate your monthly budget can throw off how much you have available to settle. 

Alternatives to Debt Settlement

Debt settlement can be time consuming and costly. This process can be unmanageable for many people, especially those who can’t fund settlement offers immediately. It is therefore important to educate yourself on other debt-relief options that can help you get back on top of your finances. If debt settlement isn’t the best route for you, don’t lose hope. There are debt management alternatives available that may be a better “fit” for your situation.