Debt Negotiation Tips – What Typed Of Debts Can Be Settled For Less?

You may have heard about debt negotiation, but do not know exactly what it is

. Debt negotiation is a practice where you bargain with your creditor (or creditors) to reduce your debt to an amount that you can afford to pay off. Most creditors are willing to reduce your balance 40-60%. You can do this yourself, or you may use the aid of a professional debt negotiator. Professionals will go through the same bargaining procedures that you would, but they may be able to get a more reduced rate in a shorter amount of time. Because professionals have previously established relationships with many creditors, they may have the ability to get quicker and lower settlements. They also work on your behalf to stop the collectors from calling you.

There are some accounts that debt negotiators cannot work with. This includes "secured debt", which is any credit or loan that is backed by a car, house, or other type of collateral. The reason they cannot work with this type of debt is because creditors can potentially repossess the collateral, instead of bargaining for a settlement. Examples of secured debt are mortgages, auto loans, secured credit cards, and insurance policies.

On the flip side, "unsecured debt" may be negotiated. This includes medical bills, personal loans, past due utility bills, past due rent, gas cards, store cards and the most popular, credit cards. Because these debts are not backed by collateral (like a house or a car), creditors are willing to negotiate to find a middle ground with the customer to get some kind of payment out of the deal. They recognize that times are tough and a settled payment is better than no payment.

Professional debt negotiators and debt settlement specialists can take all your past due unsecured accounts, include them into one settlement, and provide you with a low monthly payment that you can afford. You create a plan that pays your settlement off in a given amount of time (such as 24 or 36 months), then once you make the last payment, your credit report reflects that your accounts have been settled-in-full. This is not a debt consolidation loan. It is also not a bankruptcy plan. It is a negotiated settlement created between you and your creditors that can keep you out of bankruptcy. Most times if you have a minimum of $7,000 in total unsecured debt (all your unsecured debt added together), and are at least 90 days behind in your monthly payments, a professional debt negotiator can successfully handle your situation. Amounts less than $7,000 or under 90 days past due can often be negotiated yourself if you have the time and patience.

If any of this sounds like your current situation, stop ignoring your overdue accounts. Get debt counseling and let a professional handle the bargaining with your annoying creditors. The collections calls will stop, and many times the negotiator will not charge a fee until the debt is successfully reduced. You could finally have peace of mind

Debt Negotiation Tips What Typed Of Debts Can Be Settled For Less?

By: Crosby Bartholomew

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