Unsecured Debt Settlement – How To Legally Settle Your Unsecured Debt

Unsecured Debt Settlement – How To Legally Settle Your Unsecured Debt

Debt settlement has become a more necessary option for many consumers. As the credit card debt has continued to increase and the economy has continued to sink further, more consumers need help being released from their credit card because they simply no longer can afford to pay it. It is a very unfortunate situation that many consumers are finding themselves in now. Because of job loss, cuts in hours or other unfortunate events, such as the house payment readjusting, many consumer can not keep up on the credit card payments while trying to pay the mortgage and even put food on the table. However, there are ways unsecured debt settlement can help a consumer settle for less than half of what they owe. There are many companies available that handle debt settlement or debt negotiation for consumers. These companies handle the entire debt settlement process with the creditors. They are able to settle the debt for 50% or less of what the consumer owes through many negotiations with the creditors.

Unsecured debt settlement is a completely legal process to use to reduce and eliminate the amount of debt you owe to the creditors. The new federal credit card debt relief laws actually work to the consumers advantage to choose debt settlement over bankruptcy. When the country went into a recession, many people needed help, but did not receive any from the banks and credit card companies. They did not want to settle and refused any debt settlement agreements if they were not as much as they wanted them to be. This put consumer sin a bad posit that resulted in them needing to claim bankruptcy instead to protect themselves from law suites and judgments against them by the creditors.

When the federal government realized that credit card companies and banks were actually looking to keep consumers in debt, they changed the laws. The news state the creditors work towards a settlement and help consumers get out of debt and not stay in it.

This is a huge advantage to consumers looking to settle and pay something to the creditors. Plus, the creditors receive something instead of nothing, also lowering the number of bankruptcies that occur too. Unsecured debt settlement is an advantage to both consumers and creditors. Using a legitimate debt settlement company to help with the process is a wise choice because of the experience and knowledge they have for knowing the laws and working with the creditors. Also, a consumer does not have to pay anything to the debt settlement company until an agreement has been reached between the banks and consumer. The debt settlement agency handles all the negotiations and the entire case. The consumer has no contact with the creditors and can get on with life while the process is being handled.

The settlement firm asks the consumer to do delinquent and the traces each movement of the creditor till the point when the creditor sells of the debt to a collection agency for 20-30% of the total money the consumer owes to the lender. In other words, the collection agency retains 70-80% of the money collected from the consumer.

At this point, the negotiator contacts the creditor and offers a bulk repayment of 30-50% of the total dues and asks the creditor to wipe off the rest. The creditor finds this an interesting offer because it is more profitable as the amount of recovery is hire and comes in lump sum. The creditor therefore, eliminates at least 50% of the debt that the consumer has.

Debt settlement is a viable option to filing bankruptcy and is becoming increasingly popular amongst Americans with over $ 10k in unsecured debt. Creditors are ready to negotiate. You can literally eliminate 50% of your unsecured debt with a settlement. Check out the following link to locate legitimate debt help in your state.

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