Debt Settlements – The Truth Behind It

Most credit card debtors turn to debt settlement companies as their preferred credit card debt relief option.  But not knowing all the facts may hinder the process of debt settlements and create a distorted view of the approach.  Don’t make assumptions, know the facts before you embark on a credit card debt relief settlement program with a debt settlement company. If it sounds too good to be true, it probably is.

It is true that that debt settlements is a debt relief method successfully used to negotiate debts for a reduced percentage of the outstanding balance on a loan. Most debt relief terms include waiving the fees and penalties along with miscellaneous charges that may have accrued during the loan history. It is also true that a lower interest rate may be the result of the negotiation efforts and affordable plans propounded by debt settlement companies on behalf of debtors. However, consumers must be aware that all these benefits come with strings attached.

Don’t misunderstand us; we are not trying to steer you away from debt settlement or credit card debt settlement companies. It is a legitimate way of achieving debt relief which works well in many cases and for many folks trying to find the right option. But what you don’t know can hurt you. Having a clear vision of what debt settlement entails will allow you to dissipate false assumptions and expectations you may have about this alternative for debt relief.

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    Ease Your Way Into a Debt Settlement Program

    Advice is helpful when it is well intended and free of financial attachments.  The following tips will help you navigate the path to debt relief through a debt settlement program for your benefit.

    Don’t take no for an answer.

    Don’t be offended or heartbroken when creditors say no.  Creditors may not approve the first attempts you make to settle your debt.  Learn the lesson and move on to the next creditor. Just because one says no doesn’t mean others will too. Improve your strategy, increase your leveraging points, learn to ride the wave of debt settlement on real and clear financial statements.  Debt settlement companies operate best when there is a realistic capability at hand. Their expertise at working with creditors and debtors has been honed by years of sifting through the rubble to get to the bottom of the situation.

    Do Americans have the right to debt settlements?  

    The American government emboldens debt settlement companies to alleviate the burden of families and individuals.  However, the conditions for debt settlement require that debtors have no other choice when they cannot afford payments due to financial duress.  The law does say creditors should be open to debt settlement offers made by debtors. However, the terms are usually set by the creditors since they are not required to accept the debtor’s terms.  Therefore, although debtors do have the right to apply for debt settlement, their rights may not include setting their own repayment, reduction, and interest terms. Cases are analyzed individually to be able to offer solutions and plans. On the other hand, creditors also have rights and responsibilities.  They are not forced to agree to the terms provided by expert debt settlement companies on behalf of debtors. The government also creates laws intended to keep debtors safe from harassment and abusive practices. However, these laws do not relief anyone from debt responsibilities. Negotiating with your creditor is easier when you are not trying to fight them all the way through and instead, work with them in reaching an agreement suitable to both parties.  However, communication pathways need to be established from a professional and legal standpoint of debt settlement best practices for optimal benefit to both parties.

    Creditors steer away from debt settlement.

    When avoidable, debt settlement is not an option or even the best option. That’s because all resources must be sought before taking action with debt settlement companies, due to the technicalities of the process. Creditors instead try other options first, as well. Demonstrating that you are able to make payments on your debt is favorable towards lowering interest rates, but your balance will remain the same, the length of time of the loan may also be extended. Therefore at the end, you will have paid more in interest. The final decision will be made at the table of your financial status. After close analysis, the decision will ultimately be made by the creditor who accepts or rejects your terms, come back to the table with the halfway point and then you take it or leave it.  Who has more to lose, you and your credit score which ties into your interest rate/credit limit, or the creditor? It depends on how high the debt is. Advisors and counselors are best suited to answer all your questions. Search for reputable private and public institutions such as the National Debt Relief Organization and the Federal Trade Commission.