Are you deep in debt and credit card companies are raising interest rates, making your monthly payments higher? Have you been getting constant calls from creditors or collection agencies (CAs) about overdue payments? If yes, then you should take immediate steps to find a solution to your payment problems. You may even get help from a Maine debt consolidation or settlement company to help you get relief from debt.
How to find a solution to your debt problems
Here's a step-by-step approach to finding a way out of your payment problems:
- Analyze your debt situation: Calculate how much you owe in total on your various bills. Check what your monthly payments are and how much you save every month. Prepare a monthly budget and list your income along with the expenses (liabilities, living expenses, and monthly debt payments) you incur. Find out what areas you can curb your spending and then calculate how much you'll save every month. That's the amount you'll need to put in towards your monthly debt payments.
- Negotiate better terms with creditors: If you're getting behind on your bills and you think it'll be difficult to carry on with the current monthly payment plan, call your creditors and try negotiating lower interest rates to ease your burden. If you think that lowering interest rates may give you some relief, try negotiating with the creditors so that they forgive part of your outstanding balance and you pay much less than what you owe. Some creditors may reduce the balance depending on how much you owe. Check out these 13 tips to negotiate debts successfully.
- Get help from debt consolidation and settlement companies: If you're hesitant to negotiate with creditors or collection agencies on your own and your debt load is too high, you should get help from Maine debt consolidation or settlement companies. They'll offer programs where you can have your interest rates lowered or your outstanding debt balance reduced by a significant percentage. There are various types of relief programs such as Maine debt consolidation, Maine debt settlement, etc. Use the Mydebts section to compare these programs and find out the best option for you.
How Maine debt consolidation and settlement programs work
Here's a brief outline of how Maine consolidation and settlement programs work:
Maine debt consolidation program (debt management): When you enroll in this program, a Maine debt consolidation company or a law firm speaks to your creditors or collection agencies and negotiates your interest rates down to make your monthly payments affordable. The benefits are:
- Monthly payments towards interest and principal are reduced.
- Late fees can be minimized or even waived off to ease your burden.
- Creditors and collection agencies may stop harassing you for payments.
For further information, refer to the details on consolidation program.
Maine debt settlement: Under this program, a law firm offering Maine debt settlement services negotiates with creditors or CAs and gets them to agree to cut your debt by a certain percentage of what you owe. There'll be tax ramifications as canceled debt is considered income by the IRS and therefore you'll need to pay tax on it. Check out the pros and cons of a settlement program before you go for it.
What to ask before you choose a Maine debt relief company/law firm
If you've thought of working with a Maine consolidation or settlement company, here are the questions you need to ask them. The purpose is to make sure that you're working with a reputable company.
1. What are your company's accreditations?
It is essential that you choose a company that is accredited by the BBB or one which has a good rating (A+, A) with the BBB. If you're looking for a law firm offering settlement services, make sure it is a member of the International Association of Professional Debt Arbitrators or the TASC (The Association of Settlement Companies).
2. How long have you been in business?
You need to inquire about the Maine debt consolidation company or law firm's service background. Check out their company profile, the type of services they offer, and how much debt they can help you consolidate or settle.
3. Are you licensed to operate in my state?
You need to know whether the consolidation/settlement company is licensed to operate in your state. Check on the Office of Licensing and Registration website to find out if the company is licensed.
4.What fees do you charge?
Every settlement company or law firm will charge you certain fees for providing you with their services. The fees include:
- An upfront fee
- Monthly maintenance fee for each type of bill.
- A percentage of the money that you save in accordance with Maine law.
5. Will you be able to stop creditor/collection calls?
Maine debt consolidation/settlement law firms make every effort to prevent creditors or collection agencies from calling you for payments once you sign up. However, not all creditor/collection calls may stop.
FAQ on Maine debt consolidation and settlement
Q) I have 5 credit cards, one in collections. I'm already late on 3 other cards. Can the collection agency sue me if I don't pay the card balance?
Ans: The collection agency may or may not sue you depending upon how much you owe them and whether or not you're willing to negotiate an alternative payment plan with the CA. Of course, before making payment, you need to make sure that the Statute of Limitations (SOL) hasn't expired. If the SOL has expired, and you reach an agreement with the creditor, the SOL will restart. Learn more from the article on "Can you be sued for unpaid credit card bills?".
Q) I've accumulated debt on medical bills in Maine and my credit score has already taken a hit due to several late payments. I pulled my credit report a few days ago only to find out that one of the bills has been passed on to a collection agency. I don't think I can pay off the entire balance. Is settlement possible with medical bills?
Ans: You can settle medical bills provided the hospital authorities or the medical clinic allow it. If you owe a lot of money and you aren't comfortable negotiating with the authorities on your own, you should enroll in a Maine debt settlement program and let the law firm negotiate on your behalf. You may be able to include the account in collections in a Maine debt settlement program.