If you hire a company or attorney to settle your debts, what debt settlement fees can you expect to pay? And just as importantly, when and how do you have to pay those fees? Let's have a look.
How Much Will You Pay? The reality is that most debt settlement fees that are charged by debt negotiators these days are based upon a percentage of your outstanding debts.
And the percentage used is typically in the 15% to 18% range.
Therefore, if you have $20,000 in credit card debts that need to be settled, you can expect to pay between $3,000 to $3,600 in debt negotiation fees.
Now, the problem with having to pay a fee based on your total debts rather than the amount of savings is that there is no incentive for the negotiator to get you the biggest discount that s/he can.
Think about it.
If you are paying the settlement company a $3,000 fee regardless of whether they negotiate a 50% or 70% discount, what is their incentive to get you the most savings? None really.
When Do You Have To Pay The Fees? Ideally, you want to pay the bulk of the fees after the service has been provided.
Again, it keeps the settlement company or attorney motivated to work on your behalf in order to bring in their debt settlement fee sooner.
But alas, this is not how most debt settlement attorneys and companies work these days.
Instead, you will likely be asked to pay the fee upfront.
How Are Debt Settlement Fees Paid? Now, the problem for most people is that they simply don't have enough money to pay the entire debt settlement fee when they sign up for the program.
To allow for this, most companies will set up an installment plan that enables you to pay the fee over the first 15 to 18 months of the program.
Be for-warned however, that by agreeing to pay the fee through installments, much of the money that you set aside in the early part of the debt elimination program will go towards the fee and not actually the settling of your debts.
What Is The Ideal Debt Settlement Fee? The ideal fee is one that is free (see below), but unfortunately, if you hire a company to settle your debts, you will have to pay a fee for their service.
If you have a choice, you want to pay a fee based on results (percentage of the amount you save) and pay the bulk of the fee once the service is completed.
How To Avoid Paying Fees To Settle Your Debts? The best way to avoid paying any debt settlement fees is to choose to settle your own debts.
"Do-It-Yourself Debt Settlement" if you will.
Now, although this may seem like a daunting task, it is not all that difficult.
And if your debts are significant enough, choosing to settle your own debts can literally save you $1,000's of dollars.
How Much Will You Pay? The reality is that most debt settlement fees that are charged by debt negotiators these days are based upon a percentage of your outstanding debts.
And the percentage used is typically in the 15% to 18% range.
Therefore, if you have $20,000 in credit card debts that need to be settled, you can expect to pay between $3,000 to $3,600 in debt negotiation fees.
Now, the problem with having to pay a fee based on your total debts rather than the amount of savings is that there is no incentive for the negotiator to get you the biggest discount that s/he can.
Think about it.
If you are paying the settlement company a $3,000 fee regardless of whether they negotiate a 50% or 70% discount, what is their incentive to get you the most savings? None really.
When Do You Have To Pay The Fees? Ideally, you want to pay the bulk of the fees after the service has been provided.
Again, it keeps the settlement company or attorney motivated to work on your behalf in order to bring in their debt settlement fee sooner.
But alas, this is not how most debt settlement attorneys and companies work these days.
Instead, you will likely be asked to pay the fee upfront.
How Are Debt Settlement Fees Paid? Now, the problem for most people is that they simply don't have enough money to pay the entire debt settlement fee when they sign up for the program.
To allow for this, most companies will set up an installment plan that enables you to pay the fee over the first 15 to 18 months of the program.
Be for-warned however, that by agreeing to pay the fee through installments, much of the money that you set aside in the early part of the debt elimination program will go towards the fee and not actually the settling of your debts.
What Is The Ideal Debt Settlement Fee? The ideal fee is one that is free (see below), but unfortunately, if you hire a company to settle your debts, you will have to pay a fee for their service.
If you have a choice, you want to pay a fee based on results (percentage of the amount you save) and pay the bulk of the fee once the service is completed.
How To Avoid Paying Fees To Settle Your Debts? The best way to avoid paying any debt settlement fees is to choose to settle your own debts.
"Do-It-Yourself Debt Settlement" if you will.
Now, although this may seem like a daunting task, it is not all that difficult.
And if your debts are significant enough, choosing to settle your own debts can literally save you $1,000's of dollars.
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