What is non profit debt settlement and how does it work?
Debt settlement is one of the fastest ways to get rid of your outstanding debt amount. It is perhaps the best option if you’re even unable to afford lower monthly payments on your debt. You can take help of a number of non profit debt settlement organizations that offer this program.
What is meant by non profit debt settlement?
Non profit debt settlement organizations offer services similar to any other for-profit debt settlement companies; however, non profit organizations offer services at relatively lower cost. In fact, these companies have got their non profit charitable organization status from Internal Revenue Service (IRS).
Which debts can you settle?
It is not possible to settle all your debts through a debt settlement program. Usually, this program helps you to settle your unsecured debts, which are listed below.
- Unsecured personal loans
- Your credit card debts
- Your past due rent
- Past due utility bills
- Gas and oil card debts
- Debts on your medical and hospital bills
- Department store credit card debts
It will not be possible for you to settle your secured debts, such as, car loans and mortgage. Apart from this, debt settlement cannot help you to reduce your student loan amount along with your outstanding income tax that you’re eligible to pay.
How does a non profit debt settlement program work?
Though non profit debt settlement organization usually accumulates funds from consumer donations, yet some companies may charge certain fee for their service. However, the fees are much less as compared to what for-profit companies ask for.
The first step in a debt settlement program involves analyzing your financial condition and the amount of debt you owe to each of your creditors. Therefore, as you go for a debt settlement program, a professional debt negotiator is assigned the specific task on behalf of the company. The negotiator asks you to stop paying your creditors and he/she decides upon a monthly payment that you need to deposit into your settlement account. You can also get a clear idea about how long you need to be a part of the specific program. The negotiator also communicates with your creditors and explains your financial status thereby negotiating for a reduced payoff amount. As soon as any of your creditors agree to a particular amount, you need to pay him/her from the funds that you’ve accumulated in your settlement account. Like this, all your debts get paid off one by one.
What are the benefits of a debt settlement service?
Debt settlement offers the following benefits.
- You’ll not get any more harassing creditor/collection calls.
- It helps you to avoid any legal actions.
- It’ll help you to eliminate late payments and over-the-limit fees.
- Your debt amount usually gets reduced to 40-60% of the balance.
- A single monthly payment will help you to repay debt.
- It is the fastest way to get rid of debt.
Beware of scams while taking help of a non profit debt settlement organization. They might give you lucrative offers with the hidden intention of stealing your personal information. Therefore, ask for references from your friends and colleagues in order to find a good settlement service that will help you to repay your debt quickly.
Useful sites :
Structured Settlement Guide – All the resources and informations you need to sell or purchase structured settlements.
Structured Settlements – About Structured Settlements and Structured Settlement Sales