subject: Negotiating With Credit Card Companies – Getting Familiar With The Debt Settlement Process [print this page] Getting familiar with the debt settlement process is important before negotiating with the credit card companies. This article will try to give an insight to the debt negotiation process so that you know what actually happens and how it happens. What are the things that you need to keep in mind? How to approach any other related stuff.
Things to know:
u The minimum amount of debt that you need to have to be eligible for debt settlement is $10,000. This is defined by Federal law and exceptions are not allowed.
u If there are multiple debts, they need to be consolidated either by taking out a consolidation loan or by balance transfer (applicable only in case of credit cards). This will reduce the settlement cost and will expedite the process.
u Hire a professional debt settlement company. Make sure that the company is authentic and has a proper license and registration. Also, look for a non-profit organization. If anyone claims to be non-profit, ask to show the IRS code 501 (c)(3). Find out whether the company you are hiring is TASC certified or not. If not, step behind.
Settlement process getting familiar:
u After you hire a professional settlement firm, disclose all the information that you have related to the debt and your financial situation. The negotiator will study and build up a plan. The negotiator will then ask you to go delinquent. When the creditor stops receiving payments, it will wait for 12-16 weeks and the sell the debt to a collection agency. The agency will agree to give 20-30 cents to the creditor for every dollar that they collect from you.
u Once this contract takes place, the negotiator contacts the creditor and issues a formal letter stating why the consumer is unable to pay and will offer a new deal of 30-50 cents per dollar. This new deal will be based on elimination of the late fees, removal of service tax and over-limit charges as well as elimination of a certain amount of the debt. The negotiator all threatens the creditor that you will file for bankruptcy in case the offer is declined.
u The creditor agrees to the offer because it will never want you to file for bankruptcy. The basis on which the creditor agrees is that the deal will mean 100% ROI for the collection agency and will then eliminate the debt that you have by at least 50% and up to 70% of the total due.
This is how the process of debt settlement works!
Debt settlement is a legitimate alternative to filing bankruptcy however it is not the only debt relief option available. Check out the following link to speak with a certified debt relief specialist who will go over all your options for free:
Negotiating With Credit Card Companies Getting Familiar With The Debt Settlement Process
