Debt Negotiation

Debt negotiation (also known as debt settlement) is a process by which a company working on behalf of an individual or in certain cases the individual themselves negotiates with creditors to create a more affordable monthly payment schedule, or a lump sum payment lower than the original balance. This option can be very advantageous for someone that might otherwise attempt bankruptcy to clear the outstanding debt. Why you might ask? Not everyone will be accepted for a bankruptcy. Unfortunately, for many people they have had to find this out the hard way, therefore wasting precious time that could have been used during the debt negotiation process. Luckily though for the ones that do eventually enroll in a debt negotiation program the time enrolled is usually about half as long as a Chapter 13 bankruptcy.

If you choose to hire a debt negotiation company...

Debt Negotiation for people needing debt management and debt reduction relief If you choose to hire a debt negotiation company to settle the debts on your behalf you should first start with a review of the most notable companies you can find; typically online searches will yield the best results. As with all companies you find online please keep in mind that just because they advertise on the internet does not mean they are any good at what they do. Check their credentials. Call several different debt negotiation companies and compare the answers to your questions with the ones you have received from others. After you feel comfortable with one company the steps should generally follow this format:

An initial review of your unsecured debt will be performed by the debt negotiation companies’ underwriting department. They will be looking to see how much unsecured debt you hold, which creditors you have and if they are known to be aggressive through the debt negotiation process. Also, normally taken into account by the more detailed and reputable veterans of the industry will be whether or not substantially large cash advances or balance transfers have occurred recently. This should not necessarily disqualify you as a candidate, but rather help to give a more complete and accurate account of your true debt situation.
Once accepted into a debt negotiation program, your debt counselor will inform you of the new monthly payment (ask if the fee is included) and all of the relevant paperwork needed for enrollment will be sent to you for review. This is your opportunity to review all of the material prior to completing the enrollment process.
From this point on is when the settlement/negotiating agents will be vigorously working to settle your debts. Depending on your specific debt negotiation program this process usually takes 1 to 3 years. During this time do not be surprised if the creditors begin to call. While most companies have policies in place to limit this, it does still occur in some cases.
Once the creditor(s) accepts a settlement offer, the funds will then be transferred to them for posting to the account. The creditor will then send written documentation of the settlement, verifying the acceptance of the settlement. The same process will be repeated for the remaining creditors in the debt negotiation program
After the final debt negotiation and settlement, the program is over and you are now debt free!

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Debt Management