Debt Negotiation Companies – an Aid to Debt Free Life

Did you know that expenses of nearly every other family exceed their income and some US households have to file bankruptcy?

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Hassled and super stressed with your debt, you’ve decided to take a re-look at your finances. Fearing a possible bankruptcy, you decide to go in for debt negotiation. Huge figures and procedures begin to stress you more than the debt itself. Let a debt negotiation company rescue you out of this situation.

Debt negotiation helps you to bail out of high interest rate loans and brings down your monthly payments. It is a process through which the debtor and the creditor come to an agreement to ward off a certain amount and settle on the smallest amount possible that will be regarded as payment in full.

Negotiating debt is possible only on unsecured debts like medical bills, credit card debts etc. Schools loans, house loans, car loans may not be eligible for negotiating debt. Various debt negotiation companies are available in the market to assist you with the negotiation. Although there are debt negotiation companies that are non-profit organizations, one cannot get their services for free.

Once a debtor approaches a debt negotiation company, the company is responsible for striking a deal with the creditor for the lowest possible balance settlement. Hereafter it takes care of all communication between both parties. It is nothing but a third party assisting you in handling your debt and finances. It is possible to get elimination up to 50% on your principal balance.

Advantages of approaching a debt negotiation company

  • Most companies offer free counseling, which will help you get an insight into the program before you get started. Information is your best friend to set your financial situation back on track.
  • Since the debt negotiation agency deals with creditors on a regular basis, they usually end up building a good relation with the creditor and this will help you in getting a better deal.
  • You may have difficulty getting through the right people and this could take a lot of time. Often reaching the decision makers in the firm takes time. Debt negotiation companies save your time and effort.
  • Most debt negotiation companies are aware of the methods and procedures used by the creditors, hence quickening the process of negotiation.
  • Paper work can be as stressful as your financial crisis itself. When a company comes into picture you need not bother about filling out numerous forms.
  • Even when you negotiate on your own, more often than not there is a need to involve a third party, for example: a lawyer. This will automatically be taken care of by the debt negotiation company itself.
  • The chance of making a mistake with the negotiation reduces. You cannot afford a mistake at this stage as it may cost you a lot.
  • Most debt negotiation agencies have a customer care unit, which comes in handy.
  • Helps you review agreements entered between the creditor and you.
  • Creates a customized plan based on individual needs after considering all possibilities.
  • The legal formalities are completely handled by the debt negotiation company, which will save you a lot of trouble. There is no price that you can put on your mental peace.

Disadvantages of approaching a debt negotiation company

  • The services offered by the debt negotiation company may not be legitimate. It is important to check if it functions as per the FDPCA guidelines and also check with the State Attorney, Better Business Bureau and local consumer protection agency before entering any kind of agreement.
  • Just because the debt negotiation company guarantees that the creditor will accept a partial payment, it cannot be assumed that it will be possible.
  • The fee paid to the company will increase the length of loan re-payment and take so much more time for you to get debt-free. These programs last generally between 12 – 60 months.
  • The Internal Revenue system may consider any amount forgiven as a taxable income.

Debt negotiation, if properly done, can put an end to all your financial problems. With the right information, firm and plan this is completely achievable. As they say, precaution is better than cure, start taking a look at your finances today.

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