Personal Debt Relief - How To Manage And Eliminate Credit Card Debt

Personal Debt Relief - How To Manage And Eliminate Credit Card Debt

Want to know how to manage and eliminate credit card debt? Well, in that case, debt settlement is the answer for the personal debt relief option that you are looking for. Settlement has replaced bankruptcy after the recession. There are several reasons for this. First, bankruptcy was harming the whole economy. Second, bankruptcy is very time consuming. Third, the consumers are very badly affected by bankruptcy. Fourth, bankruptcy laws have changed and filing for bankruptcy is not so easy any longer. It is because of these reasons that settlement has replaced the traditional method of bankruptcy filing as an option of personal debt relief.

A debt of $10,000 or more is mandatory for settlement and on top of that, the overall debt needs to be consolidated for faster and cheaper settlement deals. A professional help is strongly suggested to ensure that the amount of debt eliminated exceeds the amount that can be eliminated by self negotiation. Once a professional help is called for, the debtor needs to declare delinquency by stopping payments to the creditor on advice of the negotiator dealing with the case.

A letter is sent to the creditor to inform that the debtor is facing financial turmoil and hence, he or she will fail to repay in full. A repayment schedule is then prepared by the negotiator which becomes handy during the negotiation with the creditor. After delinquency of the consumer, the creditors hires a collection agency on the trust that the agency will be able to recover the full amount of the money from the consumer. However, the creditor will not get the whole amount of money. On the contrary, the creditor will receive only 20 cents to 30 cents per dime. The creditor decides to hire the agency after waiting for 3-4 months.

The negotiator contacts the creditor directly when the creditor completes handing over the debt to the agency and offers 30-50 cents per dime against the condition that the remaining amount will be wiped off. The creditor finds the deal to be more profitable and acts wisely. This means that the negotiator's offer on behalf of the consumer of 50% repayment is accepted by the creditor. The lender then signs a new contract with the debtor and gives a specific time period during which the debtor needs to repay the remaining amount of the money to the creditor. This is how a consumer can manage and eliminate the credit card debt that he or she has.

Debt settlement is a viable option to filing bankruptcy and is becoming increasingly popular amongst Americans with over $10k in unsecured debt. Creditors are ready to negotiate. You can literally eliminate 50% of your unsecured debt with a settlement.

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