Press "Enter" to skip to content

Avoiding Potential Disadvantages When Negotiating Unsecured Debt

Debt settlement is essentially a negotiated settlement with the non-recourse lender of a debtor. Normally, lenders agree to forgive some of the debt: maybe around half, although actual results can differ widely. Once such settlements are reached, the stipulations are put into writing. It is not uncommon for someone to still owe up to 60% of what they owe to their creditors when they negotiate debt settlement. The good news is that such debt settlements are now recognized as valid by the government as debt relief. Hence, any individual who feels that they need this kind of assistance should apply for it.

Although debt settlement companies do make the process of negotiating debt quicker, faster processing does not mean a less stressful process. There are many things to consider and to look out for before finalizing one. It is not just about the amount of money to be reduced, but the quality of service that one expects. In other words, one has to choose the best debt settlement company that will meet all their needs.

How much do you owe and how much do you have to pay? Do you want to pay the entire balance, or do you want some of it waived? Are you planning on paying off your debt in installments, or do you plan on totally settling? Asking these questions will help you decide on a debt settlement company that will help you settle your debts in the most cost effective way.

It is very important to remember that the credit cards issuers are not giving you a free lunch. They are only negotiating with you on your behalf so that you will agree to their terms. You have to understand how the credit card companies work and the impact of agreeing to a sixty percent waiver on the principal amount owed. Once you have the answer to these questions you can get started on your debt settlement process.

When negotiating your debts with your debt settlement company, keep in mind that they have professionals working for them. They know how to word things to make sure that they get the agreement through your creditor without you saying a word. You may think that you have a good reason for lowering your interest rate by fifty or sixty percent, but the truth is that you owe twice as much as the company who is offering you half of what you owe. Make sure that you understand this before signing on the dotted line.

Debt settlements take place all over the country, but you need to find a qualified, experienced, and honest professional who can help you settle your unsecured debt for less than what you owe. Many people are not aware of the options that they have available to them when negotiating these debts. Do your homework and research your options before making an agreement with any professional negotiator. For more details on debt relief visit