Many of our clients and online business partners have asked us on numerous occasions – How does debt settlement work and what can we do to fix our debt problems? Well, creditors are taking huge losses, and will make meaningful compromises to get at least some of what you owe back. Tell them you simply cannot pay back what you owe, or at least not at the current monthly payments.
Credit card companies fund most Not-For-Profit credit counseling companies with Grants as a way for them to recover money from consumers who are currently not making their payments. The biggest difference is that a Not-For-Profit does not pay taxes whereas a For Profit does.
Credit card debt negotiation can be done by your self or you can hire a negotiation service providing company. Through debt settlement; you try to gain a discount on the amount of funds you have borrowed.
Credit card debt settlement is not a magic bullet to get out of credit card debt. You will find harmful consequences including a damaging effect on credit ratings. Creditors have their own policies regarding debt settlement and certain creditors will not settle directly with consumers. Additionally, consumers may face less advantageous settlement rates on their own, as opposed to debt settlement companies that have relationships with creditors and can often package bulk settlements.
Creditors know that we are continually evaluating the bankruptcy option and that they may get no money at all. This means that we have more leverage because they understand that bankruptcy is an option we will not shy away from, if necessary.
Creditors are then not allowed to take any legal action. The creditor must negotiate with the debt counsellor over the next 60 working days to determine a new repayment plan for the customer. Credit counseling is a service that will manage all you unsecured debts.
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