If you are over your head with multiple debts in Kansas, you should explore your options in order to tackle debt wisely and avoid harassment by creditors or collection agencies.
How to tackle debts through Kansas debt consolidation
When you have multiple bills and you've been making late payments on some of them, it's essential that you take action to resolve the problem. You can tackle debts by negotiating with your creditors and asking them to lower the interest rates on your bills. If you find it difficult negotiating with creditors, you should get help with an option that'll make your bill payments manageable.
1. consolidation program:
- Get low interest rate on your credit accounts.
- Replace multiple bills with one monthly payment.
- Have late fees and over-limit charges reduced or erased.
To learn how this kind of program works, refer to the steps in a consolidation program.
2. Consolidation loan
How to get rid of bills through Kansas debt settlement
With Kansas settlement programs, you eliminate part of the outstanding principal balance on your accounts. Kansas debt settlement differs from consolidation in that with settlement, you pay less than the total amount you owe. Find out how settlement works.
An example on how settlement works
Let's say, Tim has 2 credit cards, 1 medical bill and 3 payday loans. The details of the accounts are:
Credit card X has outstanding balance = $40000
Credit card Y has outstanding balance = $60000
Medical bill has outstanding balance = $25000
3 Pdls having total outstanding balance = $50000
So, Tim owes = $175,000 in total
If Tim negotiates a settlement, and his creditors agree to accept 45% of the outstanding balance, then he has to pay= 45% of ($175,000)= $78,750
So, Tim will save = $175000 - $78750 = $96250
If the settlement company charges Tim 25% of his savings, then Tim's net savings= $96,250 - (25% of $96,250)= $96,250 - $24,062.50 = $72,187.50
So, with Kansas debt settlement, you get 3 benefits:
- You pay less than you owe
- You can get rid of bills in about 2-4 years
- You save money
Downsides to Kansas debt settlement
When you choose settlement, it takes some time to accumulate enough cash to pay the settled amount. This will negatively affect your credit score at first, but once you settle your bills you can gradually repair your score. Learn how to repair credit after settlement.
FAQ on Kansas debt consolidation and settlement
However, you should settle your bills only when you're in a deep financial crisis and you cannot afford to pay the principal and interest each month. If you can afford to pay on your bills every month, a consolidation program will be a much better option, as it won't hurt your credit score the way settlement does.