Debt Negotiation Programs - How They Work And Where To Find Legitimate Services
Online, July 18, 2010 (Newswire.com) - Coming off one of the worst recessions in United States history, many consumers are left on the verge of bankruptcy. Several debt relief options have been introduced to the market and here we take a look at one of the options known as a debt negotiation program.
Debt negotiation programs are where consumers stop paying their creditors and instead pay into a savings account until around 50% of the actual balance is saved up. Once around 50% of the balance is saved, a debt settlement negotiator will go in and offer the creditor a deal. Since the debtor has not been making consistent payments, the creditor will typically consider them a legitimate candidate for bankruptcy and often accept the deal knowing that if the consumer were to file bankruptcy they would likely receive none of their money back.
Debt negotiation companies settled over $1 billion in unsecured debts in 2009 alone. This resulted in approximately $400 million being collected for creditors and $600 million being eliminated off the books for debt ridden consumers. This outstanding debt collected by the debt negotiation companies would have probably never been collected had the consumer decided to file for bankruptcy. When a debtor files for bankruptcy, creditors of unsecured debt often receive little to none of their money back. Knowing this, many creditors of unsecured debt including credit card companies are more than willing to take a debt settlement offer and receive 50% of their money rather than none at all.
Debt negotiation programs are an aggressive debt relief option and should only be considered by consumers that are experiencing a legitimate financial hardship and have at least $10k in unsecured debt. It is not intended for individuals simply looking to get bailed out of their unsecured debts. Consumers will receive a short term drop in their credit scores when they enter a debt negotiation program and also experience an increase in collection calls. This is however a tradeoff to be able to eliminate half of their unsecured debt balances.
Ultimately, debt negotiation programs do not make financial sense for everyone. It is basically the last step before filing bankruptcy. However, if a consumer is struggling to meet their minimum monthly payments and doesn't want to file bankruptcy, then debt settlement negotiation is the best option available.
The easiest way to locate legitimate debt negotiation companies that have been certified by TASC is to go through a Free Debt Relief Network . These networks qualify the debt negotiation companies based on performance and ethical standards. They will provide consumers free debt relief counseling and aid them in finding the best solution to their financial predicament. Debt relief networks are free to use and a good starting point for consumers looking for legitimate debt solutions.
To locate legitimate debt negotiation services through a top debt relief network check out the following link:
