The consumer debt settlement is a process of negotiation for debt reduction. The creditors and debtors come together for debt arbitration and agree on a settlement amount to close the credit account. The creditors gain from the debt recovery of account that is fallen behind where as the debtor achieves debt freedom by paying a substantially reduced amount than the original debt amount.
There are certain rules that determine the success rate for consumer debt settlement process. The results of debt settlement are not consistent and may vary from person to person. The results depend on lots of factors including the debt amount and the debtor’s credit history. But there are three things that you should do to remove your debts.
Make timely and regular payments:
Try to eliminate your debt by making single lump sum payment to your creditors. If it is not possible due to some reason you can negotiate to repay the debt in stretch of 12 to 36 months. However it is very important to make the minimum monthly payment for the settled amount in debt arbitration. Failing to pay any installments, you may not stop your creditors from charging you late fees and ongoing interests. It will again increase your debt balance.
Hiring settlement companies:
There are two ways in which you can negotiate for a settlement. You can either do it yourself or hire the services of debt settlement companies. If you need professional services then you can approach reputed and reliable debt relief networks or other sources for finding legitimate companies.
Besides looking for legitimate companies it is also recommended that you hire those services that ask you to pay commission only after the settlement procedure is completed. Be wary of scammers asking you to make upfront or monthly payments during the settlement process.
Do your homework:
When you decide to eliminate your debt then it is always better to have some basic knowledge about the procedure. If you know the advantages and disadvantages of the method you can make proper choices to eliminate your debt. You can also acquaint yourself with some laws that govern the debt settlement industry as well as the Fair Debt Collection Practices Act.
You can talk to you friends and gather information about other things you should do to remove your debts. It will help you to cope up with debt stress, handle creditors harassment for debt recovery and also to remain patient during the entire process.
Bankruptcy is certainly not your best way to deal with debts. Debt relief and debt settlement can certainly make a difference, and eliminate a strong percentage of your debt and in the meantime you will avoid the consequences of having to file for bankruptcy. Make sure you are always informed in regards to the best solution for you, and eliminate as much debt as you can.