Debt Settlement Fees
For the many people seeking debt relief , debt settlement is a popular option. Essentially, debt settlement means you pay off your debt for an amount that is less than what you owe. This allows you to pay off your debt faster, and it works for creditors as well because they are guaranteed money. But how much does debt settlement cost? Debt settlement fees can work in several ways. Here is an overview.
One way that debt settlement fees work is to charge the person a percentage of the amount they save. If a debt settlement company saves you $100, you would owe them a percentage of that amount. This may sound appealing, but those fees can be substantial. Some debt settlement companies charge up to 30% of the savings, which can amount to a huge amount of money you owe. In addition, there are upfront costs and maintenance fees to consider. When all is said and done, you might not wind up saving very much money in the long run.
The other option is a flat fee. Essentially, this is a fee that is determined by the amount of money you owe when you enroll in the plan. The obvious benefit of a flat fee is that you know exactly how much you owe from the beginning. There won’t be any surprises. Knowing the fee offers people a lot of comfort. This is especially true if you are trying to live in a budget. When it comes to a budget, it is better to know what your expenses are in advance. But the flat fee has some disadvantages as well. If you don’t complete the program for whatever reason, your fees will be wasted. If you drop out, the debt settlement company still gets to keep the fee you paid.
Based on the differences in the options, it is important to do your homework. Figure out which method will save you the most money. If you are confident that you can complete the program, then a flat fee is probably the best option. If you feel like you might drop out, opt for the savings fees. Don’t be afraid to discuss your options with the debt settlement company.