subject: Legal Debt Relief Methods - How Legitimate Debt Resolution Programs Work [print this page] Legal Debt Relief Methods - How Legitimate Debt Resolution Programs Work
There are several legal debt relief methods available. The most popular of all is the method of debt settlement. This legit debt resolution program has a few simple steps of operation. These are simple yet they need professional care. This article makes an attempt to explain these steps to the consumers looking for debt settlement help.
The steps involved:
A consumer needs to ensure that the overall unsecured debt that he or she has never falls short of $10k.
The consumer needs to make sure that the debts that he or she has are all consolidated in one place.
The consumer needs to hire a professional settlement company for better results compared to self negotiation.
The consumer will have to go delinquent on advice of the negotiator from the debt settlement company hired by the consumer.
The creditor then decides to hand over the debt to a collections agency for recovery after waiting for 12-16 weeks.
The collection agency agrees to pay pack on twenty percent to thirty percent of the debt recovered to the creditor. The creditor has no choice but to agree.
The negotiator contacts the creditor directly. The negotiator says that the consumer will be able to give back 30-50% of the entire due in bulk but the rest needs to be eliminated.
The negotiator also threatens the creditor by saying that in case the creditor sticks with the collection agency, the consumer will face imminent bankruptcy.
The creditor is again left with no choice but to cancel the agreement with the collection agency accept the new offer. Also the second offer means greater recovery.
The creditor waives at least 50% of the debt that the debtor has and signs a new agreement with the debtor.
The debtor then pays the remaining amount of the money to the creditor in bulk.
This is how the entire debt resolution method 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.
