Debt Settlement

Debt settlement is a way to lower the amount of the money you owe your creditors. Although you can try to arrange new agreements with your creditors without help, the process can be challenging. A debt settlement manager, on the other hand, is well-trained and experienced at negotiating new terms with your lenders. Once the settlements are made, you would begin to make deposits in a dedicated account and the money would be distributed to your creditors until the debt is wiped clean.

Know the Rules Before you Sign

Debt management companies operating in Wyoming must follow federal rules and regulations that are in place to protect consumers from fraudulent practices and rip-offs. A few things to keep in mind before entering into a debt settlement program:


Debt settlement providers must be registered with the state of Wyoming and all of its debt management counselors must be accredited.


Debt settlement companies must maintain a surety bond at all times to protect any money that you pay into the program. The bond must be obtained by a state-authorized surety, bonding or insurance company that received a high rating -- a grade of A -- from a nationally-recognized rating organization.

Before you sign

The law requires that debt settlement companies must first provide a complete analysis specific to your financial condition and then present a budget for improving your situation. Debt settlement programs aren’t suitable for everyone. If it’s determined that debt settlement is not the best option for your situation, then by law, the company must be honest in letting you know and suggest other avenues, perhaps bankruptcy.


Debt settlement providers do charge for their services, including a one-time startup fee and monthly maintenance fees. But beware of companies that ask for upfront fees. That's illegal. Also, any fees that you would have to pay later must be prominently disclosed in clear, understandable language before you sign an agreement. You should also fully understand and approve all settlement details and have made at least one payment toward the settlement. That means you don’t pay until you start to see some results.

Credit Counseling

Credit counseling is required in Wyoming before a consumer files for bankruptcy in hopes of finding alternative paths to resolve their financial problems. And if bankruptcy is indeed the only possible course of action, Wyoming law requires consumers who have filed bankruptcy to meet with a credit counselor again, after the fact, to help keep them steer clear of credit problems in the future.

The U.S. Department of Justice maintains a list of certified, nonprofit credit counselors in Wyoming for these mandated services. But even for those consumers not facing bankruptcy, credit counselors can help those in debt to find a way out of a messy financial situation.

One option offered by credit counseling services is a debt management plan. One nonprofit credit counseling service operating in Wyoming, Consumer Counseling Service of Northern Colorado and Southeast Wyoming, says debt counseling and a debt management plan should offer consumers budget planning, methods to get bills current, debt reduction, consolidation and payment plans. Be sure to do some research and check that you're dealing with a reputable agency.

Once you've confirmed that, here are some key points to ensure a successful credit-counseling arrangement.

When to Use It

Credit counseling is a method of bringing your personal debt back under control. It can also help with restoring your credit score if late payments have hurt it in the past. In most cases, credit counseling is a requirement before you can qualify for Chapter 7 or Chapter 13 bankruptcy. It's important to note, however that even with credit counseling you won't be able to completely clear your credit history. But it can help you get to rebuild your credit and improve your score, and that will help you down the road.

How It Works

Credit counseling agencies make deals with creditors. They negotiate for lower interest rates and smaller monthly payments. In most cases, the process takes several years. You begin with a monthly deposit to the service you've chosen, along with your promise not to apply for, or use, new credit during the term of the contract. There are also scenarios in which a credit counselor helps you settle a debt outright with a creditor.