Debt Management Problems - What Problems Can You Encounter When Facing Debt Management?

Debt Management Problems - What Problems Can You Encounter When Facing Debt Management

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Providing various types of debt relief services has become a very attractive business. Most companies are competing for their share of profits in this business. There are a large number of companies who have developed customized solutions to cater for credit card debt of the users. All these can be clubbed under debt management solutions.

A typical debt management company would work like this:

The Debt managers act as brokers or middle men between the creditors and the debtors.

Once a customer signs up he is asked to open an account with the company.

The user is then required to make regular monthly payment into this account. After making three consecutive payments the debt managers take up your case for negotiations.

All calls from creditors are taken up by the management.

Based on your monthly deposits, the debt managers open negotiations with the Credit card company.

At times delinquent accounts are bought by the Debt management company. They may buy your account for as less as 25 cents per dollar and then negotiate a settlement with you for a 50 percent waiver.

For a user down with debt this is an ideal opportunity to get the pain off his back. Just hand over the controls to the managers and sit back. Hold on, life is not so simple. This route could be fraught with dangers. Some of the worries for debtors could be:

Is the company genuine or a scam? How can the users know about it?

Is it safe to handover your account to the debt management guys?

Is the settlement being delayed deliberately to earn some profits?

In the absence of a written contract will they honor verbal commitments?

Is your credit information being misused?

Thus the road to debt relief is plagued with troubles. You need to be very sure you are dealing with genuine people to discharge your debt.

Debt settlement is a viable alternative to filing bankruptcy. Most consumers are able to eliminate at least 60% of their unsecured debt while avoiding many of the negative consequences with filing bankruptcy. If you are over $10k in unsecured debt you will be eligible for debt settlement.

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