Debt Settlement is a process is to consolidate your unsecured debts and negotiate a lower cost of repayment with your creditors. Debt settlement can benefit consumers that are suffering from significant debt problems by reducing the outstanding repayment balance as well reducing the amount of time it will take to pay off a debt or group of debts.
Creditors can often be convinced that it is better to accept Debt Settlement and some percentage of what is owed rather than receive nothing on a default. Through the Debt Settlement process creditors will often waive late payment charges and ultimately allow you to pay only a portion of the original balance.
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Debt Settlement Information
Taking it on your own or with professional help, the first step important step involves honestly understanding your unique financial situation. How much do you really owe and what can you realistically afford to pay monthly. You will then decide how you will approach the Debt Settlement process, with or without professional help. This self-help approach requires saving a large lump sum that you will set aside to fund the settlement. This can also include negotiating with the creditors to accept lower amounts to settle the debt if you are capable of doing that successfully on your own.
Understanding Debt Settlement
Negotiation skills and industry expertise are helpful and often necessary to accomplish an intended agreement. Negotiation is always time-consuming and difficult work as creditors and collection agents are usually tough and intimidating. Consider that you may be too close to the problem and therefore not be the best person to handle the negotiation.
With this idea in mind, debt relief company nationaldebtlaw.com is here and available to help you reach hard-negotiated favorable agreements with your creditors. We’ll work and fight on your behalf to help you resolve debt and deal aggressively with creditors. Debt Settlement is best-implemented for high-interest credit card debt and unsecured loans.
Like a Debt consolidation loan, the debt consolidation and Debt Settlement processes can help you reduce and pay down your debts in less time than a self-managed program of debt relief. Unlike a debt consolidation loan, it can actually reduce the principal balances on your existing debts by as much as 50%.
Self-Help Debt Settlement
Another approach is National Debt Law professional debt settlement services that will provide you with a new payment period and lower monthly amount. With a debt management plan and a debt relief strategy in place you will begin to set aside an agreed amount to fund the settlement amount that will be offered to the creditors or single creditor if you have consolidated your debts. This amount is based on your debt balance, income and basic financial needs.
Debt Settlement Process
Step 1, realize when to ask for help. Creditors will remain unaware of your intentions for Debt Settlement, unless you or your debt relief advocate informs them of your intention. This can be tough to do on your own since collectors will know you’ve stopped paying your monthly due and they will probably start harassing you on the phone and through the mail. This is where a debt relief company can offer major help and an emotional buffer between you and those highly-motivated difficult collectors. While you are putting aside money into your FDIC-insured Dedicated account that the debt relief expert has arranged for you, Your debt relief company will try to help mitigate those harassing calls by contacting the creditors directly and informing them of your intention to pay the debt.
Step 2, start saving money to settle your debts. Unless you have chosen to go at it alone, while you are building up your funds the debt relief company will get in touch with the creditor to negotiate on your behalf. They will show proof that you are unable to pay, and strongly attempt to influence them and get them to agree in writing to new lower payment terms and repayment balance. Without intervention, within 90-180 days after you have stopped paying a debt the creditor will be faced with a choice – turn your account over to collections and lose money, or write you off as a bad debt. Either result has negative consequence and likely will drop your FICO credit rating significantly.
Step 3, pay your negotiated debt settlement in full, satisfy your creditors, and restore your debt and credit balance and your credit rating. A common concern of the debt negotiation process is that your credit rating will suffer during the debt settlement and debt negotiation process, however, IF YOU CAN PAY your debts at the current rate you do not need debt settlement or debt negotiation. IF YOU CANNOT PAY your debts, your credit rating will suffer and there is no way out other than paying debts ad interest in full.
Debt Settlement Offer
When evaluating potential bad debts, creditors will conduct their own investigation based on what has been presented to them. This includes checking on your payment behavior with your other creditors. Once they have found that there is no other way but to settle, you will be informed by National Debt Law, or the debt relief company representing you. They will send a written “settlement offer” that you will have to approve.
When that is in order, the funds from the account you have been saving will be released depending on the amount that is written in the offer. This debt settlement process will be repeated until such time that you have paid off all of your debts completely.