Debt settlement companies in a nutshell

You’ve heard about people who are $30,000 in debt and yet somehow manage to have that debt negotiated down to as little as $15,000, half of what they originally owed. How is this possible? You’re probably thinking that it must involve bankruptcy or simply be against the law. You’re wrong. Debt settlement is a legal process whereby debt settlement companies advocate on your behalf to reduce your debt. In many cases, overall debt can be reduced by up to 50%. If you have a significant amount of unsecured debt, no collateral to risk losing, and worry that bankruptcy is your only option, you might qualify for debt settlement.

How debt settlement companies work

Debt settlement is a debt management strategy designed to reduce the debtor’s debts significantly. This process is usually recommended for people who have a substantial amount of debt that even debt consolidation may not help alleviate. When you hire a debt settlement company to work for you, you cease all contact with your creditors. Debt settlement companies speak with creditors on your behalf to persuade them to lower your overall debt, monthly payments and even the interest rates. Debt settlement companies offer effective strategies for reducing debt through complex negotiation practices.

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Hiring a debt settlement company versus doing it yourself

You will find a lot of information on how you can settle your debt on your own, without having to hire a debt settlement company to help negotiate terms with your creditors. While this is something that people can attempt, debt settlement specialists would not recommend it. First of all, effective debt settlement strategies require both aggression and patience. Haggling down your creditors is an uncompromising position to take, and you might not see results immediately.

Second, your creditors may not take your “demands” seriously. Consider a situation where someone decides that they cannot afford to repay the $15,000 they owe on one of their credit cards. This person calls the creditor and suggests that instead of continuing to make the minimum payment each month, the creditor should consider settling their debt at 50% of what is owed--$7500 instead of $15,000. A creditor would not immediately agree to this situation. The fact of the matter is that credit card companies love customers who only make the minimum payment on their cards each month. This way, they can make millions on interest. Agreeing to settle your debt would mean that they would lose out on the interest you are required to pay them.

You are probably wondering how debt settlement companies manage to settle debt then. While the scenario may be the same, a debt settlement professional would likely have much better results in dealing with a creditor based simply on the fact that they are trained experts in this field. Debt settlers have experience negotiating debt with creditors across the country and as such, have developed a relationship with many creditors that allows them to settle your debt more effectively than you could do alone.

Speak with a debt management expert today to find out if you are eligible for debt settlement. Financial freedom is only a few steps away.