All the states allow debt settlement procedures. Although the purpose of these procedures is always the same, the specifics differ by state. In this article, we covered all the facts that are necessary for you to know if you want to settle your debt in the Sunshine State.
Does Debt Settlement Really Help?
The main benefit of using debt solutions in Florida or any other state is to receive savings in exchange for fees paid to the debt-settling organization. According to an AFCC (American Fair Credit Council) survey, over 95% of customers receive an average amount of $2.64 in savings in exchange for every $1,00 in fees.
Debt Settlement Process in Florida
Florida’s debt settlement process involves negotiating with your creditors in order to lower the size of debt as much as possible. In most cases, creditors agree to provide you with the softest discount program and the lowest interest rates possible. They do so only when they see a legal opportunity for you to go away without any debt at all. And, yes, that’s also possible in some cases.
Debts Subject to Settlement in Florida
The types of assets that can be saved by debt settlement programs in Florida may differ by the service provider but typically include:
- signature loans
- private student lawns
- credit card debts
- old repossessions
- department store cards
- unsecured debts
Besides, you should know that the following types of debt are usually not subject to settlement in the Sunshine State:
- property mortgages
- credit union debts
- cat loans
- federal student loan debt
- medical bills
- secured debts
Debt Settlement Options in Florida
Below are the most common methods used for debt relief in Florida:
- Minimum monthly payments – it’s usually the worst method as it doesn’t actually reduce the amount of debt or interest you owe. However, sometimes it’s the only available option.
- Debt management program – by enrolling in a debt management program, you allow a debt management agency to distribute a certain amount of money you can pay monthly between all your creditors at the lowest negotiable rate. Choosing from several options, you should consider debt management as one of the worst options, though, as it has a relatively low success rate in Florida.
- Debt consolidation loan – debt consolidation is a legal process that allows you to transform all your debts into a single one and lower the overall payment by negotiating interest rates. This method doesn’t allow you to reduce the principal amount.
- Debt negotiation – it’s one of the best debt settlement methods as it allows you to reduce both the principal debt balance and the amount of interest you owe. Due to this, the settlement process is often faster and cheaper than debt management and consolidation.
- Bankruptcy – filing for bankruptcy is the last but the most powerful option in your debt settlement arsenal. The formal declaration of bankruptcy officially stops collectors and sets you free from a part of up to 100% of the debt body. The negative effect of filing for bankruptcy involves diminishing your credit rating.
Seek Professional Help
Although professional debt settlement assistance always costs money, it has a much higher potential to save you money in the long run. That’s something you can rarely achieve on your own for a variety of reasons, including lack of time and experience in the field. Good luck in settling your debt!