Debt Settlement – Eliminate Credit Card Debt Paying Pennies on the Dollar
Seeking a debt settlement agreement can be a win-win situation for both the debtor and the creditor. The consumer avoids bankruptcy and the creditor gets some payment.
Seven to Ten Years
Bankruptcy has a very long term negative effect on the consumer who uses it to get out of debt. But, many Americans are facing bankruptcy. Bankruptcy can stay on your credit report from seven to ten years. That smudge on your credit report will make it very difficult to get a home, or a car, or even a job, in the future. There are other options to bankruptcy for those with overwhelming debt, credit card or otherwise.
Debt Settlement a Great Alternative to Eliminate Credit Card Debt
One such option that exists is a strategy called debt settlement. What happens is that a debtor negotiates with a creditor to pay back a portion of the debt. Looking at the alternative – missed payments, constant reminders and phone calls, bankruptcy – a creditor may very well be willing to discuss a lower payback amount or lower monthly payments. Especially with so many consumers facing bankruptcy or the prospect of defaulting, most creditors are happy to get some money rather than none. Forestalling bankruptcy can be an excellent winning situation for both you and your creditor.
Credit Card Debt Settlement Negotiation
Approaching a lender, perhaps one you have had to deal with in the past and not on the most amicable terms, can be intimidating. There is also a lot of financial background knowledge that the average consumer just does not have. The average consumer just does not have a good hold on their rights and advantages.
Pennies on the Dollar toward Eliminating Credit Card Debt
Debt settlement requires a negotiator approaching each lender and negotiate a pay-back option. Often, this amount can be quite significant -- up to 50% or more of the original debt. So many folks nowadays are on the brink of financial disaster, often looking to bankruptcy. Because of this, many creditors are relieved to be getting something on the debt rather than nothing. That can happen easily should a borrower declare bankruptcy.
Finding a Negotiator
Debt negotiators know how to approach lenders and other creditors. They have an in-depth knowledge of financial markets, economic trends, and the fluctuation of interest rates and currencies. This knowledge can be invaluable when it come to negotiating a debt settlement. Also, after preliminary negotiations, the negotiator will be able to offer the overwhelmed consumer as to their rights and option regarding the debt.
Once all the negotiations have taken place, and this can take weeks, especially if you have more than one or two creditors with whom you are trying to eliminate credit card debt, the payments will be made to the negotiator and he or she will keep track that the terms they have negotiated are kept. The debtor will end up making one affordable payment once a month, to one place, at one interest rate.
Where to Look
Finding a credit counselor is a process that requires shopping around, checking credentials, looking for testimony from others as to reputation and effectiveness of the counselor, and your own personal feelings. At any rate, debt settlement is good because it relieves the stigma of bankruptcy for the consumer and ensures a creditor will not be left holding an empty bag. Remember, eliminating credit card debt is your prime goal.
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ABOUT THE AUTHOR
Melissa Kellett has a Master in Finance and has been a financial consultant for years. She specializes in Loans for Bad Credit people and also in helping people to get approved for Personal Loans, unsecured loans, Guaranteed Unsecured Loans Online, no credit check loans, student loans among many other financial products. Visit her site at http://www.speedybadcreditloans.com