subject: Debt Relief Services – Your Debt Provider Cannot Charge You Unless Your Unsecured Debt Is Reduced [print this page] Debt Relief Services Your Debt Provider Cannot Charge You Unless Your Unsecured Debt Is Reduced
Taking a loan is very easy, however, to repay it is a difficult task because due to some unavoidable circumstances a person at time is unable to repay on time. People are always trying to find best solution to get rid of unsecured debt. Debt settlement is most viable option for unsecured debts. If debtor is unable to repay then a settlement process requires a tactful negotiations so as to get maximum reduction in total unsecure debt. Although bankruptcy is the last option, however, it has negative effect on a person's credit history.
According to FTC laws if credit debt resolution companies are unable to reduce debt by 35% then consumer need not pay any fees to the company. If debtor is blessed, debt can be reduced up to 70%. In most cases resolution companies charge up to 15% of the reduced debt amount.
There are many advertisements on television, in the newspapers, on pop-up internet ads from debt settlement companies. Businesses providing debt settlement services must be licensed and debtor must protect himself or herself from paying too much or debt provider does not charge unless the unsecured debt is reduced.
Some debt provider offering debt management services try to negotiate with the creditors to reduce interest rate and remove late fees charges on debtors account. A debtor should first talk with a certified credit counsellor to plan out a debt management plan. If debtor agrees to the plan then debtor should make payments to the debt management provider who further on behalf of the debtor pay the amount to the creditors. While this whole process is carried out debtor should make sure that debt provider does not charge unless the unsecured debt is reduced so that there is no outstanding towards the creditors.
Some businesses offer debt settlement services which negotiate with the creditors to settle a debt for less than the full amount owed by the debtors. Before talking with the creditors the service provider discuss the whole issue with the debtors. No payments are made to the creditors on debtors account until a settlement is reached. Debtor will be charged fees for the services.
There are other options which a debtor may look into other than taking help from debt provider like:
Pay-off the debt by budgeting monthly expenses.
Plan out a way to increase source of income like doing part-time job.
Talk to the creditor directly to reduce the interest rate or lower the monthly EMI.
Borrowing money from friends and relatives or credit union.
