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In uncertain economic times, financial stability is a status that many Americans strive for each day. The ability to live your life without constantly worrying about resources is a value that’s universally cherished here and abroad. However, financial stability is much easier to talk about than to actually sustain. A sudden layoff, an unexpected divorce, illness in the family or bad spending habits can deplete your savings and put you in debt indefinitely.

As you go deeper into debt, your income will be spread thin between day-to-day expenses and debt payments. Your credit health is also likely to suffer, making loan applications more difficult and raising the interest rates you need to deal with. For some people, the strain becomes so great that they’re compelled to file for bankruptcy – a legally recognized status that will heavily damage your financial standing and reputation for a decade or so.

To avert the possibility of bankruptcy and to strengthen their financial standings, some people opt for a program known as debt settlement. This is the process of debt experts negotiating with creditors to reduce overall debt. A successful settlement occurs when the creditor agrees to forgive a percentage of the total account balance. Only unsecured debts can be paid using this method. Unsecured debt refers to the type of debt that does not involve collateral or does not involve assets that can be repossessed like real estate or cars.

When you opt for debt settlement, your debt will be assessed by a debt relief agency to determine whether it’s qualified or not. If it qualifies, a debt relief expert will be assigned to you and he or she will work out the most sensible payment plan possible. The debt relief agency will then communicate with your creditor for negotiation. If an agreement is struck on the amount of debt to be forgiven, the payment plan will be put in effect and a savings program will be put together through a special savings account.

Debt settlement isn’t exactly magic. However there is a good chance that a significant amount of your debt will be forgiven, your credit health will likely take time to recover because you aren’t settling your debt under the original terms that you and the creditor agreed on. Still, the credit hit that will not be as severe as it would be if you declared bankruptcy. With debt settlement, you get the chance to bring your credit back to where it should be and plan for the future.

Debt settlement has been known to help strengthen the finances of people who are struggling with debt. Here are a few ways debt settlement produces that effect:

  • You’re Being Guided by Professional Advice– When you enroll in a debt settlement program, you will receive assistance and advice from debt relief experts who have the right kind of knowledge and experience to tell you what you can and can’t do in your situation. This helps you make smarter decisions with your money and helps you stay disciplined as you climb your way back from debt.
  • Avoid Bankruptcy – Debt settlement is your best bet for avoiding bankruptcy when times get really tough. This prevents you from hitting financial rock bottom and keeps your credit afloat albeit degraded somewhat.
  • Healthy Finances for the Future – Due to the reduced amount you need to pay, you’ll be able to get your debt taken off the books faster than you would under the original terms. This takes pressure off your monthly budget and allows you to use your funds to pay off other debts or for expenses that can help you become more productive.

Bankruptcy can have negative implications on your ability to borrow more money, your chances of finding new work and your personal reputation. Debt relief saves you from that kind of long-lasting trouble and opens the door for faster debt recovery.

At the end of the day, debt relief is a viable option to strengthen your finances when you’re faced with tough financial challenges. If you’re unsure if it’s the best move for strengthening your finances, seek a debt relief expert’s advice.

Debt Relief programs eliminate your debt in the best possible way. At CreditAssociates we have a special team of experts to help you break the debt cycle and provide you the tools and knowledge to secure your financial future.