subject: Debt Negotiation Programs – The Advantages And Disadvantages Of Debt Negotiation [print this page] Debt Negotiation is a branch of the debt relief industry. The way it works is that people who are struggling with their debts work with a debt relief company. This company then works on their behalf to analyze their debts. An example of a debt relief company is Curadebt
They look at the vital debts and also what a person can potentially afford to pay back. They then use this data to come up with a revised payment plan that can be presented to creditors.
The key to this working is a debt relief company using their industry and negotiation skill to present the plan to an individual's creditors. If a person or company if forced to declare bankruptcy then their creditors will end up with virtually nothing.
The creditors understand this and realize that it is in their best interests to negotiate terms.
However, they do not do this willingly. In fact it can take up to 6 months for the negotiations to be finalized. This is one of the disadvantages. During that time people pay what they can afford into holding funds. They effectively stop repaying creditors. This can have a negative effect on credit scores.
The credit score will improve once the payment process begins and progresses. The advantage of using these programs is that a significant discount can be negotiated in the amount of debt that someone owes. It can allow people to pay off their debts much more quickly they would have thought possible.
It is also much easier to get into one of these programs than other forms of debt relief. Debt consolidation for example requires people to make consistent payments before being able to negotiate reductions in interest rates.
There are fees for debt negotiation and these are generally calculated as a percentage of the amount of money that the debt relief company is able to save an individual.
The most important thing is for individuals, or companies to speak to the best debt relief companies, as this can make a big difference. Look for debt relief company reviews such as Curadebt reviews, or BBB ratings.
Debt Negotiation Programs The Advantages And Disadvantages Of Debt Negotiation
