Hey!!! Just before you approach a debt settlement company to help negotiate a debt relief from lenders and or creditors or if you are thinking of doing it yourself, it is pertinent that you check your eligibility status first. Many debt settlement agreements have attached to it eligibility criteria and most debt settlement companies will not proceed in the process except they are sure you meet these basic criteria. Although part of the process is a status check, however, this article will afford you the opportunity to know firsthand the prequalification criteria for debt settlement programs.
Evidence of inability to sustain loan repayment: In other for an individual, small business owner and or organization to qualify for debt relief through debt settlement option such individual, small business owner, and or organization must first be in a precarious financial situation. By being in a precarious financial situation I mean it must be evidently clear and certain that your present state does not allow and afford you continue meeting your financial obligations. This present status can be due to extraneous factors which have limited your capabilities to earn the level of income you are earning before the decapacitating event. You must have had a substantial reduction in your earning capacity, For instance, you are earning a gross income of $20,000 monthly from your various income generating activities but now can only gross about $4,000 monthly income thereby limiting your ability to sustain the repayment of your debt.
The loan must exceed $7,000 minimum: For an individual, small business owner and or corporate organizations to qualify to use debt settlement to get debt relief, such individuals, small business owner, and organization must owe more than $7,000 and must have defaulted on their repayment schedule for several months. Debt settlement companies wouldn’t want to treat debt that is less than $7,000 because lenders and creditors will not have enough incentive to negotiate such indebtedness. You must be behind on your repayment plan for several months otherwise if you are just one or two months behind lenders and creditors will have you repay the full amount due.
Ability to sustain the minimum payment into an escrow account: most debt settlement companies will require individuals, small business, and organizations willing to use their service to open an escrow account with them and demonstrate the ability to sustain minimum payment into the account since debt settlement companies are not set up for charity. It is important that they generate income and their income is usually from interest paid on money used in writing off clients’ debt.
Having accessed yourself based on the criteria set out above, individuals, small business owner and or organization burdened by huge indebtedness can negotiate debt freedom either by going through the process on their own or using a debt settlement company. However, because of other financial expertise available to debt settlement companies, it is advisable to use a financial advisor/ counselor in the employment of a reputable debt settlement company to navigate the process.