Debt Solutions - What Are Legitimate Debt Solutions For Consumers in This Market?

The current market scenario is such that many people have become unemployed and many others are facing huge salary cuts

. Those who are saved from these situations live in constant fear. Small businesses have taken a huge hit and many have collapsed. On the other hand the common consumer has accumulated several loans. He/ she is finding it impossible to repay these loans due to the current market scenario. In desperation many debtors are contemplating bankruptcy. On the other hand the creditors realize that if the debtors are compelled to pay money which they do not have, they will only be forced to file bankruptcy. In this situation, the creditors will lose all their money. If a large number of debtors file for bankruptcy, it will cause the financial ruin of several financial institutions.

The creditors are now trying to recover as much money from the debtors as may be possible. For this they are proactively offering liberal debt settlement programs to the debtors who are unable to repay their loans in full. The debtors can also approach the creditors for debt settlement. The creditors will assess the actual paying capacity of the individual debtor and decide a reduced amount. This negotiated and reduced amount can be repaid as a lump sum or in installments. The creditors can also be requested to waive off the penalties and reduce the interest rates on the amount payable.

The debtors can then pay off several high interest loans with a single low interest one. This process is called debt consolidation. Moreover, the unsecured part of the loan can be converted into secured loan. Secured loans usually have a much lower rate of interest compared to unsecured ones. This combination of procedures reduces the loan amount to almost 50% of the original amount payable. All these procedures are completely legal. This is because the creditor agrees to ignore the previous contract made with the debtor and enter a new one. This change is recorded on paper. In fact once the settled amount has been repaid, the creditors give the debtors a letter of full and final settlement.

For the millions of Americans who are at least $10 k in unsecured debt, it would be financially prudent to consider the debt settlement option. Creditors are very worried about collecting their debts and legitimate debt settlement companies know exactly what methods to use to get your creditors to agree to eliminate a certain percentage of your unsecured debt.

Debt Solutions - What Are Legitimate Debt Solutions For Consumers in This Market?

By: alvin stump

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