subject: Legally Prevent Spending Back Charge card Debt in Complete! – The Debt Settlement Procedure Explained [print this page] Debt settlement is the process of negotiating with your creditors to pay off a reduced amount as final settlement in return for having the rest of the debt forgiven. It is a practical alternative to filing for bankruptcy which can have long term consequences. It is a legal and effective method of managing debt before it goes out of control.
It is advised to hire the services of a professional who will look into your current financial condition and help negotiate all possibilities leading to a less stressful way of going about your settlement. They will also handle the collection calls from credit agencies on your behalf, freeing you from the harassment of creditor by sending a written application to the credit card company requesting them to stop the pestering of debt collectors.
Credit card debt settlement process can take about a few months to a few years to be completed based on the debt amount and the creditor rules. Some credit card companies may ask you to pay a lump sum negotiation amount, whereas some give the flexibility to pay in parts for a period of time. You can also request a convenient payment option as per your financial condition.
A major setback that you could suffer because of the settlement is the effect that it will have on your credit score. Debt settlement companies generally ask the clients to default on payments for a few months so that they are in a better position to negotiate with the creditors. When the creditors feel that they are not going to recover the amount of the debt, they are more willing to come for negotiations. However, they will also report the instances of your repayment default and this could appear as negative information in your credit report.
Another point to keep in mind is that debt settlement companies normally charge huge amounts for the services rendered by them, which could be up to 10-15% of the debt balance. This means that while you negotiate with the creditors to lower payments, you end up paying almost the same amount when you consider the fees paid to the settlement company. Therefore, it is crucial that you make a thorough study of the organization and the fine print in your contract with them before signing them on.
Legally Prevent Spending Back Charge card Debt in Complete! The Debt Settlement Procedure Explained
