It wasn't all that long ago that
American's faced great financial crisis. As a nation, we struggle
with debt, and it keeps us from achieving a better life. Debt
Education is here to help you change all that ... just ask!
REAL PEOPLE ... CARING ABOUT REAL
ISSUES
Debt Settlement or Negotiation
A debt settlement is a program where you hire a debt settlement
company to negotiate your debt amount down with your creditors.
The goal is to settle your debt for far less than what is owed
or what you yourself could have negotiated.
The process is also called third party debt negotiation or debt
reduction. If negotiated properly, it can dramatically reduce
your debt. Settlements typically range from 25% to 80% of the
current debt, with the typical debt settled for about half. The
process of negotiating the debt typically takes anywhere from
2-8 months depending upon the debt settlement company used.
Certainly you can try to negotiate your own debt settlement with
your creditors, but typically there is a great success rate in
working through a professional who has already established a relationship
with the various creditors and can negotiate with your best interest
in mind.
There is definitely a right way and a wrong way to handle this
procedure and failing to do so correctly will have very negative
results. Debt negotiation requires some knowledge and expertise
in order to negotiate the most favorable settlement. The process
is very different than that used to place you into a credit counseling
program.
Most professional debt negotiator fees are contingency-based.
You are not billed by the hour like bankruptcy attorneys do, but
instead you are usually charged a fee for the total amount of
the debt and a fee based on a percentage of the savings that is
negotiated for you.
This fee arrangement is a good structure because it allows you
to reward the negotiation company for getting you the best possible
deal from your creditors. The more the debt comapny saves you,
the more they earn. And, typically, the fees for the debt settlment
service are less than those charged by bankruptcy attornies or
debt counseling agencies. It is truly a win-win situation for
all concerned.
If you have unsecured debt of at least $5,000, you may
be able to reduce your debt 20% to 80% through a debt reduction
settlement. While a typical debt is settled for about half, how
much you save will depend on numerous factors.
The types of unsecured debt which may be settled include credit
card debt, store charges, medical bills, service contracts, lease
defaults, billing disputes, repossession deficiencies, signature
loans, charge offs, past due utility bills, liens, judgments,
attorney fees and debt stemming from lawsuits. Most any types
of unsecured debt can be settled!
Things to consider when negotiating a debt settlement include,
the type of debt, who the creditor is, the amount of debt, how
old is the debt, your ability to pay the debt as agreed, your
assets and liabilities, and so on.
Some debt settlements require up-front cash to settle the debt,
while others allow you to include the debt negotiation fees in
with the monthly payments making them transparent costs.
Some credits will require minimum payment to reach settlement.
For example, if you have a $1,000 debt, you may need $500 cash
to settle it, although the amount could be more or less. Most
of us, however, do not have ready cash to settle our debts. Dont'
worry, these debt settlement companies have a viable strategy
that works to resolve this issue. Our best advice is to contact
them and hear what they have to say.
Your financial obligations will most likely be settled over a
period of time, settling each account as funds are raised.
The first step in the debt settlement process is to determine
if you have money obligations that meet the requirements of a
successful debt settlement. The second step is to work up a realistic
budget and see if you can qualify for debt settlement as an option
to your financial problems.
There's a lot of information to read through on the Debt Education
website, but we feel this is extremely important material. We
strongly recommend that you bookmark
this page right now. This will allow you to read
at your leisure, and should you need to attend to other matters,
easily return back here at your convenience.
The Debt Education website was built for you. Please explore
our website. You'll find resources and information on virtually
every aspect of financial planning and money management. These
debt delp resources are designed to help you get out of debt
and stay out of debt. You can achieve financial independence.
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Debt Education PO Box 5156, Santa Cruz, CA 95063
