Debt Settlement: Who Is A Good Candidate?
The focus of this article is to explore the criteria we use when identifying likely potential candidates for debt settlement.
In accordance with our ethical business practices and in the interest of full disclosure, we are obligated to state up front that debt settlement is not an ideal solution for every consumer. With that said, for those consumers who do qualify, debt settlement can be an honest, honorable solution to their financial challenges. And it is truly unfortunate when a well-meaning consumer in need of debt relief avoids debt settlement because of confusion about what debt settlement is and what it means. We hope this article will clear up some common misconceptions about debt settlement.
So what does a good debt settlement candidate look like?
The first and most important question is: Is this consumer on the brink of falling behind on their payments in the near future, or are they already delinquent? If so, they may be an ideal candidate for debt settlement.
Debt settlement is a viable alternative to bankruptcy that can help creditors reduce their losses. If a consumer is a verifiable bankruptcy candidate, they may also be an ideal candidate for debt settlement, because creditors may be more willing to negotiate with them.
Additionally, a consumer may be a good debt settlement candidate if they are suffering from financial hardship. Whether it's divorce or a lost job, any event that prevents a consumer from paying back their debts as scheduled is considered a financial hardship.
When a consumer is suffering from financial hardship, it is a signal to creditors that they originally intended to pay their debt back in good faith, and that the consumer did not set out to commit fraud.
The final criteria to determine a good settlement candidate is the amount of their debt. Those consumers with at least $10,000 in total debt, with each account totaling more than $1000, are potentially good candidates.
Consumers with accounts less than $1,000 should attempt to pay them off on their own, because the savings they may receive from debt settlement may not offset the fees and other costs involved. Such accounts also often do not result in generous savings.
Ultimately, for a debt settlement negotiation to be successful, it must be in the best interest of both the consumer and the creditor. The only way to determine whether a candidate meets the criteria for a successful debt settlement is to schedule a consultation and examine their unique situation.