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DebtCareTaker.com
D
ebt settlement, also known as debt arbitration orDebt Negotiation, is an approach to debt reduction in whichthe debtor and creditor agree on a reduced balance that willbe regarded as payment in full.
A
s long as consumers continue to make minimum monthlypayments, creditors will not negotiate a reduced balance.However, when payments stop, balances continue to growbecause of late fees and ongoing interest.
C
onsumers can arrange their own settlements by usingadvice found on web sites, hire a lawyer to act for them, oruse
debt settlement companies
.
S
ome settlement companies may charge a large fee up front;or take a monthly fee from customer bank accounts for theirservice, possibly reducing the incentive to settle withcreditors quickly. One expert advises consumers to look forcompanies that charge only after a settlement is made, andcharge about 20 percent of the amount by which theoutstanding balance is reduced.
ServicesOffered
 
Debt Settlement
Credit Card DebtSettlement
Debt Consolidation
Debt Negotiation &Solution
Debt Elimination
Debt Relief Advice
 
DebtCareTaker.com
E
ssentially, theDebt Settlement Companynegotiates on theborrowers’ behalf with creditors to reduce the overall debts inexchange for an agreement upon regular payments to bemade. Only credit card debts can be handled, not studentloans, auto financing or mortgages.
F
or the debtor, this makes obvious sense – they avoid thestigma and intrusive court-mandated controls of bankruptcywhile still lowering, sometimes by more than 50%, their debtbalances. Whereas, for the creditor, they regain trust that theborrower intends to pay back what he can of the loans andnot file bankruptcy (in which case, the creditor risks losing allmonies owed).
T
he debt settlement option available through the creditorarbitration process is a much better alternative as comparedto filing forbankruptcy under Chapter 13. In many ways, thedebt settlement facility can be compared to Chapter 13, sincea percentage of the debt is "paid" while the remainingbalance is forgiven by the creditor.
DebtSettlement
 
 The unique differenceis that DebtSettlement isgenerally a "privatematter" and verymuch under thecontrol of the"debtor", whereasfiling for bankruptcyunder
Chapter 13
isa "formal" processand is guaranteed toappear on "publicrecord". Chapter 13 istotally a legal issueand under the controlof the courts andleal urisdiction.
 
SpecificationsDebt ConsolidationDebt Settlement
The average percentage of total debt to be "reduced"30% to 40%40% to 60%Duration of the "option"3-5 years, with 5 years beingthe new "standard" limit.2-3 years, depending upon themonthly budget and other financialresources."Control" of the optionLegal in nature - the court hastotal control and power.The consumer can decide andinitiate.ExposureLegal and appears as a "publicrecord" on your credit ratings."Private" in nature and the creditratings can be "corrected" later onwith a "debt repair program".Duration of the negativeimpact to credit ratingThe "bankruptcy" flag persistson your credit report for atleast 10 years or more. Canaffect your future jobs andloan applications during the"bankruptcy" period.Negative marks remain on yourcredit report for a maximum of 7years. Generally, majority of theconsumers recover their credit-worthiness within 1-2 years aftercompleting the "program".
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