Sometimes in life, we don’t really realize how much trouble we are in until it comes knocking on our doors, repeatedly. Sometimes we just breeze through life much too nonchalantly that we are unaware of the consequences of our decisions especially when it comes to our financial stability. It is essential that we acknowledge responsibility for every decision we make in our lives including the ones that probably spell ‘financial disaster’.

If you find yourself buried more than knee deep in debt and there is no way for you to pay all your debts all by yourself, you might want to look at a solution known as debt settlement. You can opt to negotiate with your creditors yourself but it is advisable for you to engage a third party professional to be the negotiator. It is better when a professional negotiates for you as creditors usually trust credit relief companies more than they trust individuals. Besides, your credit consultant is definitely more knowledgeable and experienced in handling cases like this and will be able to approach your issue from an objective point of view.

You might want to make sure that the company you engage to help with your debt settlement is a reputable company so the risks of you getting cheated out of your own debts is very much lower. Bear in mind that there is usually a fee for professional credit consultation so you have to be prepared to pay the consultants. Sometimes they charge a certain percentage of what you will be paying your creditors every month. It depends on the severity of your case. So whatever you do, be careful and be very wary of companies that show you their fees breakdown even before you have a chance to tell them of your predicament.

Engaging a company that offers debt relief services can be very relieving as you will not have to deal with your creditors all by yourself. Your appointed credit consultant will act as liaison with your creditors and negotiate with them to reduce the amount of your debt so you will be able to pay off the said debt. Rather than losing 100% of their money with you filing for bankruptcy, most creditors will offer debt reduction. This means that instead of paying off 100% of your debt, they would reduce the amount up to 50%. In the end you could be only paying for half of what you originally owed. After your creditors agree on the reduction rate, your appointed credit consultant will then work towards restructuring your monthly payments so you can pay your creditors at an amount that you can afford.

Sometimes your creditors would insist on you making a one-time full payment of the reduced debt. This is when your credit consultant would probably advise for you to consider debt consolidation. You could apply for another loan to pay off your existing creditors. Nowadays most banks offer lower interest rates provided you start to consistently make your monthly payment immediately. So you can use the loan to pay your existing debt.

It is advisable that you be careful that you don’t slip into a comfort zone where you don’t feel any sense of urgency to start paying off your consolidation loan. Although the interest rate might be lower than usual and you feel like you have plenty of time to pay them off later, it is always smarter to start paying them off immediately. After all you would not want what happened to you with your previous creditor to happen all over again would you?

Try and keep in mind that if you decide not to engage a credit consultant to negotiate with your creditors on your behalf; you may have to prepare yourself to be able to convince your creditors to reduce your debts on your own. Most importantly, you will need to be able to keep your emotions in check because your creditor is less than likely to grant you a high debt reduction rate unless you treat the negotiation like a business transaction.

Your creditor is also not going to be the one offering you a certain percentage of debt reduction. So you may need to be smart and strategize on how to make your own debt settlement offer and convince your creditor to agree to it. It is never good to go in blind as this will give the creditors the impression that you are not serious about settling your debts. You can do some extensive groundwork and let your creditors see that you have considered all options and your research has led you to come to the conclusion that your offer is the best option there is for you to pay them and for them to get their money back. Don’t pick a fight though. It might take some convincing from your part. But if you handle it like a professional, you will most likely get what you come for.

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Category: Finances
Keywords: debt settlement, debt relief services, debt settlement offer