subject: Debt Settlement Programme - An Aggressive But Proven Debt Relief Option [print this page] Debt Settlement Programme - An Aggressive But Proven Debt Relief Option
Debt settlement is a process of getting rid of your worries for less than the actual amount owed to the creditors. It is a legal agreement between a debtor and the creditor on an existing debt to negotiate a settlement. With the economic crisis exacerbate day by day, credit card companies are willing to arrive at a settlement of debts because they are dealing with unsecured loans and the debtors under extreme pressure can file for bankruptcy. When the credit card company is convinced that the debtor is not able to repay the entire amount, it calls for debt settlement. The debt settlement can be done with the help of an agency.
The ideal choice is to create a win-win situation between the debtors and the creditors. If the debtor has a good reputation and has been paying the bills consistently in the past, then the company might agree to settle the credit card bill for less. Since the motive of the credit card companies is to maximize profits, they charge a huge interest rate in the beginning. So the Settlement Company is often successful in negotiating with the creditors up to 60 % of the debt elimination.
Monthly payments which have to be made by the debtors through a Settlement programme are deposited in a Trust Account. These funds do keep increasing month by month and once there is sufficient accretion in the Account, the Debt Settlement Companies go ahead and try to negotiate and settle with the creditors.
This is of great advantage to the debtors as it reduces their burden when less than the actual amount due is paid and it is a one- time payment. For that they can allocate funds on a monthly basis. The interest rate is also less and any penalty fee can be ignored. The most important aspect is that the debtor can avoid bankruptcy, thereby maintaining his/her social status and goodwill in the society. The credit card company also has an advantage in that it gets at least a portion of the advance made and can avoid the bad debts going out of control. Hence, debt settlement programme is the proven debt relief option in the current scenario.
Debt settlement companies are widely available in just about every state however some are just flat out more experienced than others in debt negotiation. That's why it's so important for consumers to use debt relief networks. These networks qualify and only accept the best performing debt settlement companies.
