I opened a small business last year and building up to that caused my personal finances to get a little high. I recently enrolled with DMB financial but after doing the math I am really not saving enough for it to impact my credit score the way that it will. I would like to get my settlement as low as possible, but also minimal impact to my score. I have $12,000 in cash available to pay all my debt.
Can I use $12,000 as leverage to pay off $32,000? Will I be able to negotiate myself? Can I get out of DMB financial?
You can always terminate the agreement with any company. Here is my guide on how to attempt to get satisfaction.
But before you get outraged or rush to cancel, I would suggest you read the client agreement you signed when you enrolled in their service. I would seriously doubt they said anything about protecting your credit or giving you a guarantee they could settle for that amount including their fees.
The first step to being a protected consumer is to be aware what the legal client agreement you are signing says and the terms you agreed to.
That being said, it is as close to impossible to minimize or eliminate the impact to your credit when you settle. By definition settlement is achieved almost exclusively by defaulting on your debt sufficiently to get your account past due enough to be eligible to settle.
Settlement is not a free pass. It’s a tool that is best utilized when you have defaulted, can’t afford the debt, but have some assets to pay a settled amount. You also have to be willing to have the forgiven debt noted on your credit report for the next seven years and potentially pay income tax on the forgiven debt if you are not insolvent.
If you want to compare your debt relief options, use my Get Out of Debt Calculator.
I would suggest you call DMB Financial back, discuss your expectations and make sure you are on the same page with them.