subject: Personal debt help - how to negotiate with creditors and eliminate bad unsecured debt [print this page] Personal debt help - how to negotiate with creditors and eliminate bad unsecured debt
Personal debt help has become very important for the consumers. This has happened because of the recession. After recession, millions of Americans faced financial troubles because either they lost their jobs or they found that their incomes were reduced. As a result, they failed to repay their debts and they started filing for bankruptcy. In the process, they lost their credit score and they lost their eligibility for fresh loans for the period of 7-10 years.
This can however be avoided with the help of debt settlement. Settlement involves negotiating with the creditors and eliminating bad unsecured debt by at least 50% and sometimes up to 70%. For debt settlement to work, a consumer needs to be at least $10k in unsecured debts and the debts need to be consolidated so that the debts do not stay scattered. Once this is done, the consumer is then required to hire professional debt settlement company.
The negotiator from the company advises the consumer to stop paying the creditor in order to prove that the consumer is in financial trouble. Once the creditor stops getting the payments from the consumer, it waits for 90-120 days and then calls for a collection agency for recovering the debt from the consumer. The creditor hopes that the threatening calls from the collection agency will force the creditor to repay the debt is full.
The collection agency takes advantage of the creditor and agrees to pay back only 20-30% of the debt that is recovered from the consumer. The creditor is helpless and agrees to the deal of the collection agency. This is when the creditor is contacted by the negotiator. The negotiator offers a better deal to the creditor. The negotiator offers 30-50% of the debt repayment to the creditor in bulk at the cost of eliminating the remaining amount of the debt.
The negotiator also threatens the creditor that the consumer will be forced to file for bankruptcy if the creditor decides not to agree. The creditor is left with no other choice but to agree to the deal. There is although a motivation for the creditor. The new deal actually means greater recovery compared to the recovery by the collection agency.
Once the creditor agrees to the deal, the consumer needs to repay the agreed upon amount of money to the creditor in bulk within the specified time period. This is how one can negotiate with the creditors and eliminate unsecured bad debt.
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.
