Debt Management in Colorado
Debt management in Colorado offers residents structured support to repay their debt.
Coloradans can access personalized debt management plans (DMPs) that consolidate multiple high-interest credit card debts into a single monthly payment through accredited credit counseling agencies.
These agencies negotiate with creditors to reduce the interest rate and waive costs. That’s how the debt can become more manageable and individuals in Colorado can repay it within realistic deadlines. This way, monthly credit card payments fall within their financial abilities. These personalized debt management programs aim to fit monthly debt payments within the available income.
A debt management plan usually takes three to five years to complete, by which time you are debt-free. Colorado consumers can achieve financial stability, avoid bankruptcy, and gain valuable financial education which are the stepping stones for a debt-free future.
Debt Counseling
Credit counseling in Colorado helps people find debt relief and improve their financial health.
Certified credit counselors offer personalized guidance and support, starting with a thorough assessment of an individual’s financial situation, including income, expenses, and outstanding debts. The counseling agency helps Coloradans develop realistic budgets and tailored debt repayment plans that match their repayment abilities.
Part of credit counseling service is the valuable financial education that gives people the knowledge to avoid future debt and continue working towards long-term financial stability.
Debt Consolidation
Debt consolidation loans roll existing debts into one single loan that gets paid with one monthly payment.
With a debt consolidation loan, you can lower your debt payments because they often have lower interest rates, especially compared to credit cards. With more manageable interest rates, a debt repayment plan is easier to handle. Also, single monthly payments are more practical compared to several payments to different creditors and banks.
Debt Settlement to Reduce Your Debt Level
Debt management, debt counseling, and debt consolidation options do not reduce the amount of debt you owe. They make the repayment terms more workable but you still repay the full sum.
What if your current income isn’t enough to repay your debt, though? That’s when you need to settle your debt. Debt settlement offers you the option to repay your creditors a sum of money that fits within your financial situation. As for creditors, they know that this is the maximum amount of money they can expect to get from you, so they are usually available to settle the debt.
You can expect to see your debt reduced by 25 to 50%, to a level that can be repaid. If your financial debt in Colorado is making your life miserable, then debt settlement could be a viable way out of debt.
Debt settlement can be reached for most unsecured loans such as credit card balances, medical bills, a student loan, and payday loans.
The Debt Settlement Process in Colorado
Choose a debt settlement company
You can settle your debt on your own but it’s preferable to work with a debt settlement company like ClearOne. You want professional advice and the know-how of Colorado debt relief specialists.
Assessing financial situation
The debt settlement company will assess your financial situation. Debt settlement companies will look into your income, expenses, credit report, and types of loans to see where you stand and how much debt relief you need to recover your financial strength. Part of the assessment involves determining how much money you can set aside every month to build up a savings account that will pay the debt settlement.
Negotiation
The debt settlement company reaches out to your credit card companies and negotiates settlement. Creditors may be reluctant at first to provide card debt relief, but if they see that there is no realistic way for you to pay the full debt, they will typically be willing to settle it. They will prefer to get something rather than you filing for bankruptcy in Colorado, in which case they get nothing.
While negotiations last, you make monthly payments to the aforementioned savings account. You build up funds to pay your creditors once settlement has been reached.
Debt settlement agreement and payment
Once you and your creditors have agreed to the settlement, you release the money from the savings account to pay them. The debt has been settled and you should receive confirmation from your creditors of the settlement.
Your Debt Is Settled
Once your debt is settled, you don’t owe anything else. You have secured a reduction in your debt and are free to start with a blank slate. With careful financial planning, you can stay debt-free.
Your credit score will take a hit with debt settlement because you have not paid your account while in the program and at completion, you haven’t repaid your debt in full. However, your credit score is expected to recover over time.
Keep in mind that the forgiven debt amount may be considered taxable income by the IRS. Once your debt is settled, you should consult a tax professional to understand the potential tax consequences.
Debt Settlement in Colorado
Are you facing difficulties with personal debt collection accounts in Colorado? Save yourself from financial stress with ClearOne’s expert debt relief services.
When debt relief solutions like debt counseling and debt consolidation don’t provide the respite you need, debt settlement is the best solution. If you live in Colorado and are struggling with increasing debt that you know can’t be repaid in full with your current source of income, call ClearOne. Our Certified Debt Specialists will discuss with you all available debt relief programs and help you lighten up your debt load.
Call us today at 866-481-1597 and get a free savings estimate!
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