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Before using any tool you need to understand how it works in general and the rules specific to Oklahoma.
Debt Settlement Basics
Debt Settlement is a step you take when you are at a point when your income is not enough to keep up with your debts. When you engage in debt settlement you hire a third party to negotiate with your creditors so that you can settle your debt for less than the full amount. A typical arrangement would have you make payments to an agency which would then make payments to your creditors.
To settle or not to settle – The question as to whether or not to enter into a debt settlement arrangement is a serious one. It may help you eliminate debt and avoid bankruptcy, but there are also consequences. A debt settlement will negatively impact your credit score and any amount of your debt that is forgiven will be considered by the Internal Revenue Service to be taxable income.
Oklahoma lacks any significant regulation of debt settlement practices in the state. Because of that. you have additional responsibility on you to be vigilant when considering a debt settlement agency to help you. Here are some guidelines to consider:
Get it in Writing
Whatever the service is being offered, get it in writing first and make sure you understand exactly what services are being offered and what is not being offered.
Among the things you should get in writing are the fees. Shop around and compare services with fees to find the option that makes sense for your needs.
Check on the company before signing anything. Have they had complaints or litigation? Will they be able to deliver on what they are offering?
The Bottom line
When all is said and done, it is your financial future at stake. It is important you take action to gain control of your debt and finances and there are agencies that can help. Taking action is vital, but also important is that you not rush into an agreement with the first company you talk to. Take enough time to research companies and look at what they are offering and how much it will cost you.
In Oklahoma, credit service organizations, including credit counselors are licensed and regulated by the Oklahoma Department on Consumer Credit.
Find a licensed credit counseling agency in Oklahoma by reviewing the list of approved agencies on the Oklahoma Department of Consumer Credit website. You can use an organization located in state or meet with an out-of-state organization licensed in Oklahoma either over the phone or internet. Many Oklahoma residents use Consumer Credit Counseling, a United Way agency which is one of the largest and oldest nonprofit credit counseling organizations in the state. The group has locations throughout the state.
Contact the organization and discuss the fee structure for credit counseling. Most agencies will work with you to establish a fee structure that fits your budget, and many will provide services free of charge when necessary. For example, Credit Counseling Centers of Oklahoma, another nonprofit organization, does not charge for the initial visit of 60 to 90 minutes and charges a $25 per month fee for consumers who opt for a debt management plan.
Meet with your credit counselor and provide information about your financial situation. Your counselor may provide advice or recommend a financial management course. Another option is a debt management plan, which involves the agency negotiating with your lenders. You would then make a monthly payment to the agency, which pays your creditors directly. If you decide to sign a debt management plan, familiarize yourself with the Oklahoma Deferred Deposit Lending Act, which regulates the plans.
If you sign a contract for services, under the Oklahoma Credit Services Organization statutes, you have until midnight of the fifth day after you sign the contract to void the contract without penalty.
Follow the advice of your credit counselor and work to make lasting changes in your financial situation. Keep documentation of all credit counseling services and paperwork in case you need the information in the future.