Debt settlement company

What are Debt Settlement Programs?

Debt settlement Programs (a.k.a Debt Negotiation or Debt Reduction Programs) are debt relief programs that help you negotiate with your creditors to significantly reduce your overall unsecured debt (includes the original debt amount + interest charges and late fees). In layman’s terms, experienced negotiators help you alleviate your debt and pay up only a small portion of your total debt by identifying the best debt settlement program that suits your needs. Most debt companies can reduce your debt from 22% – 55% of your total debt. This allows you to settle your debt much more quickly. This kind of program is perfect for those who want to eliminate their debt in a couple of months.

Most debt settlement companies charge a client 9% – 14% of their total debt.
How does it work?

Step # 1
Decrease your Main Debt amount
Most debt settlement programs start by negotiating your main debt amount. On the average, the main debt amount is decreased by 35 % to 50 %.

Step # 2
Decrease Late fee charges
One of the reasons why debts increase to unmanageable amounts is the accumulation of late fees. In some cases, late fees can be more than the main debt amount. Most Debt Settlement programs work to remove the majority, if not all, of your late fees.

Step # 3
Decrease the APR (Annual Percentage Rate)
Just like late fee charges, the APR can also accumulate and add a whopping amount to your outstanding debt. Agencies negotiate to decrease this fee to a much affordable amount.

Step # 4
Pay the Monthly Settlements
Once your agency has settled the reduction of your total debt you must then make sure that you pay your settlements regularly. Keep in mind that your agency worked hard in reducing your debt to a manageable amount. Missing any payment might cause you more problems than what you had to begin with. The amount you have to settle is based on your current financial situation.

TIME FRAME
In most cases, the debt settlement process takes around 4-8 months. This timeframe, however, is not a strict rule. It can be reduced or stretched depending on the client’s request and capability of settling their account. It is not uncommon to hear that a normal credit card debt settlement can last up to 4 years or sometimes even more.

Why make use of debt settlement services?
Many countries all over the world are slowly waking up to the dangers of paying liberally through their credit cards. In many cases, even students right out of college are accruing debts that seem monumental. Bad debts can seriously affect your creditworthiness, making it almost impossible for you to get loans when you really need it. By availing of the services of a debt settlement agency, you can work out the easiest way to pay off your loans.

One of the best ways to get in touch with the best debt settlement companies is through online services that will give you access to a nationwide network of qualified debt relief providers. These services search the ongoing trends in the debt relief market and give you the best solution based on your unique financial needs. They do not require you to provide them with any secure or sensitive information. In most cases, you will get comprehensive data just by entering your debt amount, state and pin code into their search engines. With services such as these, debt settlement has never been easier.

By: Devendra Mishra

Unfortunately, like everything in life, there are pros and cons of using a debt settlement company for debt help. For those of us that are in debt and facing the possibility of bankruptcy, debt settlement seems like the best debt help option available. However, there are pros and cons which people should be aware of before they decide to move forward and enroll their debt in a settlement program.

Cons:

1. A debt settlement program can increase your probability of being sued: No one really knows what prompts a creditor to sue. A former debt collector, now an employee of DebtAbcs revealed that while collecting for creditors, the debt collectors received direct orders from their supervisors to send all accounts that were with a debt settlement program to their legal offices. Keep in mind that this doesn’t mean all creditors will sue you for being in a debt settlement program. It just means that there are creditors out there that don’t like the idea of debt settlement programs and will do what is necessary to make sure you continue to pay.

2. You can get lower settlements on your own:

The concept of debt settlement is not new. If you are disciplined enough and have strong negotiation skills, you can settle your own debts and probably pay less money than if you were to hire a company. It is not an easy process; if you have the extra time and skill, it is definitely something to think about before hiring a company.

3. You chose the wrong company:
Using the Internet to find help with your debt could put you at risk for stumbling upon a fraudulent organization. There are plenty of good companies out there, but there are also a ton of bad ones. Do your homework before taking that leap and risk being further in debt.

Granted there are some scary elements to hiring a debt settlement company. However, there are reassuring aspects as well.

Pros:

1. Great alternative to bankruptcy:

If you can find a debt settlement company that is reliable, trustworthy and acts in good faith, then you can get out of debt without ever having to file for bankruptcy. The approximate total time it will take to be out of debt and repair your credit will hover around five years. In the long run, when compared to bankruptcy, it’s the more attractive debt help option.

2.Convenient:
When enrolled in a debt settlement program, you only have to worry about making single monthly payments. Communication is now between your creditors and the debt settlement company. The embarrassing task of having to explain your financial hardship falls to the debt settlement company. You save time to devote other priorities in your life.

3.You save money:

As an example, you enroll 20k worth of debt into a three-year program. While in the program interest still accumulates on the debt at 29 percent, resulting in 30k in debt. The standard settlement rate is 45 cents on every dollar. Including the 15 percent company fee, after three years you will have paid about 18k. By comparison, repayment of 20k dollars with compounded interest becomes a 60k debt repayable in 45 years. You save 42k dollars if enrolled in a debt settlement program.

By no means, there are no perfect debt settlement company programs. However, at DebtAbcs we intend to analyze the pros and cons of company programs. This gives the consumer the opportunity to make an informed decision on the best debt option for their situation. We hope that this information we have provided will give you an objective perspective to consider when weighing all the pros and cons to using a debt settlement company for help with your debt. Stop by our website for more debt help information and advice.

By: Jade Lee

While most of the people are aware of debt settlement as an option to eliminate debt or avoid bankruptcy, it is now important for them to be aware about the legitimate companies. Taking advantage of the situation, there are several fraudulent companies that have crept into the market blending in with the legitimate debt settlement firms. They promise to help you eliminate 90% of your debt or provide free service with hidden conditions. Be careful not to fall into their deadly trap and learn where to find legitimate debt help.

Some of the key points that would help you associate with the right settlement program.

A legitimate settlement will analyze your debt structure right before joining. They will study the amount you owe in secured and unsecured amount, in order to determine consolidation or settlement. Loans from multiple sources can be consolidated. If you have over $10k in unsecured debt a settlement is probably the most appropriate decision. The average settlement in this market is around 60% meaning if you owe $20k you should expect to settle for $8k with the help of a legitimate debt settlement service. The settlement company will check your debt and advise the appropriate action plan and will usually provide free counseling to determine the best course of action. They can charge you only after the settlement program begins and negotiation is signed. They will negotiate with the credit card company on your behalf to reduce the loan amount, once the negotiated amount is signed, the lender cannot make further calls to disturb you or sue you. Also the settlement firm should ensure that you don’t get any harassing calls from collection agencies.

The above listed points are the main task a relief firm would do for settlement. Besides, it is important to verify the credentials and authentication of the firm. I saw an advertisement of the debt relief company that had BBB engraved at the bottom of their homepage, but when tried to find its name in the BBB listing you could not see one. This is just an example. You must carefully verify:

The company is a member of The Association of Trade Settlement Listed in the Chamber of Commerce Accredited with BBB

You will save much trouble later, if you are a bit careful in the beginning. The best way to verify you are getting a legitimate company is to use a debt relief network.

By: Erik Stump