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Debt negotiationThere are a number of people who become victims of debt every year.There are a number of reasons why people can fall into debt some of them include inability to pay back the loan on time, not able to meet with the credit card payments on time, high interest rates etc. For people who are in such a situation there are a number of options to manage their debts including debt management programs, debt consolidation loans, debt reduction services etc. One of the most effective programs that helps in reducing debts in the debt negotiation. Debt negotiation forms the basis of all the plans.
The debt negotiation process
This is a strategic process and requires good communication and convincing skills. There are a number of factors that determine successful debt negotiation. The process basically involves communicating with the creditors and convincing them to lower your interest rate and hence payment.
The first thing that needs to be verified is the delinquency status. The creditor would agree to negotiate if it has been taken for a long time so as to avoid any net loss. Debts are usually written off from 180-220 days and this is the best time to obtain lower settlements. If the debt is written off then it is no longer considered to be active and the creditor would not negotiate.
There are times that the creditor might hire a collection agency to get back the amount. This usually occurs when the debts are written off. In such cases you can negotiate with the debt collector or the debt buyer because their functioning is directly regulated by, the Fair Debt Collection Practices Act administered by, the Federal Trade Commission.
You can also get debt help from debt negotiation companies. There are professional debt negotiation companies that deal with the creditors on behalf of the debtors.
Taking help of debt negotiation companies
Since the debt negotiation companies are professional agencies they know the art of dealing with the creditors and getting the payment reduced by almost 40% at times. However these companies should be chosen with care and a number of things should be taken into consideration.
When you choose a debt negotiation company you should make sure that the company is authentic and is approved by the Better Business Bureau. It is also important that you confirm from the better business bureau about the company and whether it has had any complaints in the past.
You should also go through the testimonials of the previous clients so that you can be sure about the functioning of the company. When you approach, the company ask them how much do they charge. Usually the debt negotiation companies work on non-profit basis or commission basis. However, you should confirm about these details before taking any decision.
Debt Consolidation Versus Debt Negotiation
Debt consolidation and debt negotiation and the two major options available to people when they opt to take debt help.
The debt consolidation services would have a payment plan with most credit card and collection companies. When you take the help of a debt consolidation company you would be offered a lower monthly payment plan based on a lower interest rate that they would have arranged with the creditors. The interest and hence the payment would be lower as compared to the credit card interest and hence would be a feasible option and help you save money.
With debt consolidation you can have one benefit that you will no longer get harassed by, your creditors till you are making the new payments on time. However, the disadvantage would be that you would be taking a new loan that would involve a number of costs and you would be liable for the payments towards these loans.
On the other hand with debt negotiation you stop making payments to your creditors. The debt negotiation company would either take monthly payments from you and keep, it in an account, or would let you keep the money in your own account. When you are making monthly payments to the company they negotiate with your creditors and lower your payments by 40-50% of your total amount of debt.
The disadvantage is that the debt negotiation program would result in lowering your credit score for as long as you are in the program. However, usually the debt negotiation companies require the creditor to make the credit report show paid in full so that it would not leave a negative mark on your report.
Debt negotiation companies
Some of the debt negotiation companies are mentioned below.
American Debt Management:
They help their clients by providing them with debt negotiation programs. They provide debt reduction strategies that would eliminate your debts. You can fill their online secure form and get in touch with them.
DebtXS:
Their aim is to help prevent their customers file bankruptcy and hence help them come out of debt. They apply debt negotiation to help their customers. They have tailor made debt negotiation programs according to the needs of their customers. You can contact them at 7668 Warren Parkway Suite 325, Frisco, TX 75034 ? main: 800-841-9785 or fax: 866-314-1610.
Consumer Defense:
They follow the credit card negotiation program to help people come out of debt. They have successfully helped a number of people with the help of these programs and help them get rid of their debts. You can contact them at The Hinsley Law Firm; HOUSTON, TX; Phone: 713-465-3304; Toll-Free No: 1-866-465-3304.
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