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Expert Debt Management |
Understanding Debt Settlement |
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Debt settlement is known by many names such as debt negotiation or debt elimination, yet all of these names are referring to the same thing. Debt settlement is usually something that has to be considered by those that have not been able to stick to a debt consolidation plan or cannot afford the monthly payments associated with a debt consolidation plan. While this is not a situation that you want to encounter, when you choose debt settlement you may be able to pay just 50% of the total amount that you owe to your creditors. Signing up with a debt settlement company will allow you to stop making payments on your debts immediately. Instead of paying your creditors the settlement company will collect monthly payments from you and pay them out to the creditors. Meanwhile, the debt settlement company is handling all of the communications with the creditors, trying to get them to lower or suspend interest fees or even lower the payoff amount that is due. The problem with debt settlement is that a lot of creditors do not take kindly to it. In fact, a lot of creditors will simply forward your debt to their legal department and judgments, liens, and garnishments may be forthcoming. Many consumers have actually ended up in worse shape after a debt settlement contract than they were in before. It's important to look at all of the terms, communicate with your creditors, and not rush into any of these programs. Fees for these programs vary wildly, so be sure you do some shopping around before you agree to anything. Many people have to seek out a credit repair service after their debt settlement experience, which will cost more money. A credit repair service may be able to give you some help, but you may find that the debt settlement or debt negotiation haunts you for some time. Be sure that you do your due diligence as a consumer and choose a program that will benefit you long term. For more information on Home Equity Loans visit our link. But how does this all work? Fact: Your creditors end up subsidizing all or a large part of most debt consolidation services. What you ask? Well before you say this sounds too good to be true, keep in mind that your creditors are not lowering your interest rate and making it easier for you to make smaller payments out of the goodness of their hearts. They realize if they don't help you out a little you may file bankruptcy and they will never recieve a penny of what you owe them! Disclaimer: This site is not , nor should it be taken to be, legal, financial or other professional advice. It merely provides a generalized guidance and generalized information only. Consult a financial advisor or an attorney to discuss any legal or financial issues involved with credit and debt decisions. |
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