When debt gets out of control, and New York consumers fall behind on payments, they have a few options. For example, some consumers with overwhelming debt attempt debt settlement. This involves negotiating with creditors to lower balances, interest rates, or both. Normally, consumers in New York who pursue debt settlement work with a debt settlement company. However, some indebted New Yorkers choose to negotiate with creditors on their own. Both debt settlement strategies come with advantages and disadvantages, and neither is perfect for all New York consumers with debt. In fact, you may ultimately decide that filing for Chapter 7 bankruptcy is a better option.
The Perks and Downfalls of Working with a Debt Settlement Company in New York
If everything goes well, New York consumers who hire debt settlement companies enjoy the convenience of having someone else handle negotiations with creditors. In a perfect scenario, a consumer pays reduced balances over a certain amount of time, and eventually clears their debts. Yet, unfortunately, many consumers in New York don’t have positive experiences with debt settlement companies.
Here are three things that often go wrong.
- The fees charged by New York debt settlement companies are so high that they negate debt savings earned through negotiation.
- A lot of debt settlement companies turn out to be scam operations. These scammers take money from New York consumers and do nothing to reduce the debts in question. To make matters worse, they frequently advise New York consumers to stop making payments to creditors. This causes credit scores to drop significantly.
- Even legitimate debt settlement companies in New York have inconsistent success rates. Often, consumers pay fees to get debts reduced, only to get no results.
Knowing that hiring a debt settlement company comes with risks, consumers in New York should research their options heavily before choosing a service. They should also get all intended services in writing before agreeing to a plan. Or, if consumers are confident about their negotiating skills, they can take the DIY approach to debt settlement.
How Some New York Consumers Can Successfully Negotiate with Creditors on their Own – And Why Others Should Pursue Different Options
Debt settlement is possible because many creditors are willing to take reduced payments instead of none at all. Typically, these creditors come out better than they would by selling unpaid debts to debt collectors for pennies on the dollar. Therefore, if New York consumers present reasonable offers to their creditors, they might get what they want.
However, New York consumers considering DIY debt settlement should ask themselves these three important questions.
- Are they good negotiators? Striking deals with creditors might requires numerous phone calls, persistence, and lots of patience. So, this is a bad debt relief strategy for those who give up easily.
- Do they have the money to pay debts? Some creditors expect New York consumers to pay reduced debts in one lump sums, while others offer payment plans. Either way, consumers who negotiate with creditors should make sure that they have the necessary cash to keep up their end of the bargain.
- Are they good candidates for Chapter 7 bankruptcy? No consumer in New York should take the decision to file bankruptcy Yet, for those incomes cannot support heavy debt burdens, Chapter 7 bankruptcy is the best option. Yes, bankruptcy destroys credit scores, but in many cases, so does debt settlement.
Most consumers who pursue either debt settlement or Chapter 7 bankruptcy end up with radically reduced credit scores. This is why, after debts are discharged or under control, they should immediately enter a credit repair plan.
Why New York Consumers Coming Out of Debt and into a Credit Repair Plan Should Start by Checking their Credit Reports
Whether you choose a debt settlement option, Chapter 7 bankruptcy, or some other solution, you should keep tabs on your credit reports throughout and after the process. Even under the best circumstances, creditors and the credit bureaus often misreport consumer information.
So, unfortunately, when complicated processes are thrown into the mix, these organizations make even more mistakes with consumer data. Then, these mistakes end up on credit reports as errors, and these errors can bring down credit scores.
Therefore, New York consumers should protect their improving credit scores by checking their credit reports regularly. Then, if you find that mistakes on your credit reports are unnecessarily bringing down your credit score, contact Credit Repair Lawyers of America in New York. Our credit repair law firm works under the Fair Credit Reporting Act (FCRA) to clean up credit reports legally and for FREE.
The Free and Legal Way to Get Better Credit in New York
Don’t let errors on your credit reports bring your credit score down. At Credit Repair Lawyers of America, we’ve been cleaning up credit reports for consumers since 2008 for free. How do we do it? All of our fees come from the defendants in settled cases. This is why our clients pay nothing for the work we do.
Let’s start the conversation about what we can do for your credit. Set up your free consultation today by calling Attorney Carl Schwartz at (646) 859-3045 or sending him a message through our contact page.
For more information about Free Credit Repair, please visit https://creditrepairlawyersam.com/credit-repair-free/.