subject: Credit Card Debt Relief - What Do A Professional Debt Relief Companies Actually Do? [print this page] Credit Card Debt Relief - What Do A Professional Debt Relief Companies Actually Do?
Credit card debt relief has become a very important thing because card debts have caused enough financial troubles for the consumers. The high interest rates charged by the creditors for the use of cards or other unsecured loans have led to a trap of debt from where the consumers have repeatedly failed to come out. The situation has become worse because of the recession that had hit the US economy. The professional debt relief companies have done a good job in helping thousands of consumers to get out of their debts. These companies handle the situation on behalf of the consumers who approach them and help the consumers to get a reduction in the amount of debt that they have.
The most widely used method is that of debt settlement which is widely practiced by the relief companies. When the consumers approach the relief companies, the professionals ask for all the details of consumers.
When a consumer provides the full details of the debt he or she has to the professional company dealing with the case, the professional negotiator from the company creates repayment plan and then asks the consumer to stop paying the creditor. At the same time, the negotiator also send a letter to the creditor stating that the consumer will not be able to repay the debt because of the financial troubles and also attaches the proof of financial troubles that the consumer is facing.
This letter ensures that that the creditor does not take any legal step against the consumer. As the consumer stops paying the creditor, the creditor decides to wait for 12-16 weeks and then the creditor contacts a collection agency and sells off the debt at a very low price. The collection agency agrees pay only 20-30% of the debt that is collected from the consumer to the creditor. It is then that the negotiator contacts the creditor and makes a new offer. The negotiator offers to repay 30-50% of the debt that the consumer has and ask for the remaining to be eliminated. The creditor finds the new deal to be a better one and hence, agrees to the deal.
The creditor then eliminates at least 50% of the debt that the consumer has. Once the creditor agrees to do so, a new agreement is signed and the consumer then repays the remaining amount of the money to the creditor in one month. This is how the professional debt relief companies help the consumers to get relief of the debts!
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. Check out the following link to locate legitimate debt help in your state.
