Credit Debt Settlement Programs

What Education Can You Expect To Receive?

The education portion of a credit debt settlement program can be broken down into four separate areas.

1. Financial Review And Budget Analysis

Unquestionably, the most important education that you should receive as part of the settlement program has to do with your finances. And to be clear, this "education" should take place before you sign up for any program.

In fact, one of the very first things that a representative of the company should do with you is conduct a thorough financial analysis for you (and with you), followed by the preparation of a budget. Why is this so important? Two reasons...

1. First of all, credit debt settlement is not an appropriate debt solution for everyone. And without conducting a thorough analysis of your finances (reviewing your debts, assets income, etc.), followed by the preparation of a realistic personal budget, there is simply no way to evaluate whether or not you would make a good candidate for this type of program. 2. Secondly, the help and guidance that you receive with the preparation of a detailed personal (or family) budget, will be invaluable not only in helping you get out of debt, but also in helping you stay out of debt so that you can achieve your financial goals in the future.

2. Complete Review Of The Credit Debt Settlement Process

In order for you to make an informed decision as to whether or not a settlement program is even right for you and your particular situation, you must have a thorough understanding of exactly what will be involved. Can you raise the money you will need within 24 to 36 months? Would you be better off filing for bankruptcy, either Chapter 7 or Chapter 13? What fees will you have to pay and when are they due? When will your creditors be informed that you wish to negotiate a settlement with them? Do your creditors have to even negotiate with you? What further interest charges and penalties might you face from your creditors? Can your creditors still sue you? Are the savings that you realize from settling a debt taxable?

These are just some of the questions you need answered as part of your "education" as to what is involved in a typical settlement program.

3. Further Educational Resources

You may also wish to ask a prospective settlement company what education they will provide during the program. Many companies offer their clients financial education in the form of consultants, websites and/or written materials.

4. The Program Itself As A Hands On Education

Just the process of going through a credit debt settlement program can in and of itself be a valuable education. Among other things it can teach you the importance of creating a budget while reinforcing the discipline needed to follow that budget, steadily accumulate savings and meet your financial goals, both in the short term and the long term.

In fact, in a survey of consumers who had successfully completed a settlement program, 50% said that they planned on continuing to put aside savings each month towards sound financial goals such as retirement planning, emergency funds or a down payment on a house.

The Most Important Part Of This Education

I mentioned this earlier, but I feel it is significant enough to say again. The most important "education" you will receive throughout this process is the financial analysis and budget preparation help prior to choosing to enter the program in the first place. Your current financial situation (your assets, debts and income) will determine whether or not a credit debt settlement program is right for you. Do not allow yourself to be "sold" on the program just because it sounds like a good debt relief option.