not made payments in the last 3 months on their current loans or credit cards, they are currently delinquent, which is the name that creditors and banks use for those people who have stopped making payments. The debt negotiation process is the next step in order to start solving the debt and credit card problem.
Nowadays, People need to learn more about the process itself, and if debt negotiation is the proper way to go. Self-teaching about the pros and cons of debt negotiation is a good first step. One thing to know about "debt negotiation" is that is also known in the market as debt arbitration.
- Debt Negotiation benefits -
Once the counselor has received the power of attorney, the counselor takes the case to a negotiator in oder to see what your total debt is. Once the negotiator gathers all the information, he will start calling the creditors in order to stop all the collection efforts, calls and letters, after that he will tell the creditors that any communication will be made through him and any offered deal will also have to go through him as representative of the client.
The debt negotiation team will define a payment plan that fits the client's payment capacity and they will start renegotiating his debts to try and lower them as much as possible. One of the things that increases the debt by a lot is the interest charged to the current debt and that is one of the main problems that debt negotiation attacks.
After making a debt negotiation deal where the debt will be reduced, the negotiator or counselor advices the client to take a look at the different deals that creditors offer, once the client makes up his mind the reduction process is on track. You can receive a reduction in your debt between the ranges of 40 to 50 percent and that is a great help, your monthly payment will be highly reduced and if you can make use of savings the process will take no more than 12 to 18 months, it all depends on the amount of money owed.
Another benefit is that these debt negotiation companies after settling the accounts, they also invite the client to start a learning process where he can learn how to permanently avoid future debt and how to handle his finances in order to maintain himself out of debt.
- Debt Negotiation damages -
A downside of the debt negotiation program is that it lowers the client's credit score for as long as he stays in the program. However, most debt negotiation companies require the creditor to update the credit report as paid in full so it does not show up as a negative entry on your report once your account has been settled.
Some debt negotiation companies include a credit repair service that will remove the negative items caused by the debt negotiation program. You pay for this service as part of their program.
Debt negotiation will show in credit reports; and as long as you stay in the debt negotiation program, you will not be able to apply for new loans or credit lines. You will have to stay away from any kind of credit services. Then again, once you finish paying off your debts and successfully leaving the program your credit score will start picking up as long as you keep yourself away from debt.
Although debt negotiation is a great way to avoid bankruptcy and free yourself from delinquent debt, people have to consider that there are many debt relief solutions. It all depends on what type of debt you have and how bad it is. Take a look at curadebt.com and seek professional counseling.
We have different articles of interesting topics and current and former clients' experiences with our programs. Take a look at the different situations on Debt Negotiation and debt related topics that people can fall into and how to keep yourself a debt free person.
About the Author
Jennifer Siegel is a contributing writer to http://www.credit-card-debt-negotiation.com/ Is currently writing some special articles to guide business on how to manage debt and avoid bankruptcy. For Free Information on Debt Negotiation and Debt Help Consultation, call toll-free 1-877-850-3328
