If you can’t pay your bills, meet your daily expenses, and you’re suffering from severe debt, a debt settlement might be the best option for you. Settlement programs are also known as debt negotiation programs, since both involve arbitration or a negotiation process. Through the negotiations, it’s possible to reduce the total outstanding debt by 40% to 60%, depending upon the debt condition, and how effective the negotiation process has been. Settling credit card debt through negotiations is a highly common process nowadays, and many companies offer debt settlement services. If you plan to avail debt settlement services, it’s important to know something about how the process works.
How debt settlement works?
Typically, the process takes between 18 to 36 months, provided the debtor makes decent monthly payments, and does not go in for the bare minimum monthly repayment schedule. During the process, the settlement company evaluates the debt condition, and works out the total amount to be repaid to the creditors. Thereafter the company engages a negotiation process directly with the creditors. During the negotiation, the company requests the creditors to waive the late fees and penalties imposed upon the debtor. This reduces the debt burden. Thereafter the company further negotiates to reduce the actual debt owed, and this is where the expertise comes in. If the company debt expert is experienced and effective, the person can ague on behalf of the debtor and convince the creditors to further reduce the outstanding debt. Subsequently, a compromise is reached where the creditor refuses to give more concessions, and the final debt amount is worked out. The creditors are happy since they stand a chance to recover some of their outstanding amount, rather than loose it totally. The settlement company than works out a loan with the debtor, that has a reduced rate of interest, and affordable monthly repayment amounts. The negotiated net payable debt amount is redeemed to the creditors, and the debtor ends up having one loan to pay, and one creditor to deal with. By making regular payments, it’s also possible to improve upon the credit scores.
Many companies offer debt settlement services, and it’s possible to find a debt settlement company that best suits your requirements by searching online.
No comments:
Post a Comment