Credit Card Consolidation Facts - How A Credit Card Debt Relief Program Works

Credit Card Consolidation Facts - How A Credit Card Debt Relief Program Works

Credit card debt consolidation and elimination is a subject matter of debt settlement Settlement is a debt relief program which helps the consumers to eliminate at least half of the unsecured debt that they have. What makes this method of settlement different and popular is that this method unlike the method of bankruptcy ensures that the consumers do not lose their credit score. But how does this credit card debt relief program work? The method has a very simple and straight forward method of operation. There are three major steps of the method. They are:

Delinquency.

Negotiation.

Elimination.

Any consumer with an overall credit card debt of $10k can use this method. The professional negotiator dealing with the case will ask the consumer to block any payments to the creditor in order to prove that the consumer is in financial trouble. Here the consumer listens to the negotiator's advice and after that the negotiator simply sends a letter to the creditor stating that the consumer will not be able to repay the debt in full. This responsibility for this failure goes to the choked income options for the consumer.

In the negotiation stage, the creditor actually sells the debt to a collections agency. The negotiator then contacts the creditor and offers the repayment of at least half of the debt and states that the payment will be bulk provided the creditor wipes off the rest of the debt. The threat of bankruptcy is used by the negotiator at this point of time so that the creditor agrees.

In the elimination stage, the creditor actually agrees and eliminates at least half of the debt that the consumer has. The consumer then needs to repay the rest of the money in bulk. This is how the debt settlement program works.

With the new FTC laws recently passed, debt settlement is a legitimate alternative to filing bankruptcy. Creditors are ready to negotiate and now you won't have to pay a fee unless your debts actually settle.

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