According to statistics cited in The Money Alert, ?43 per cent of all? families spend more than they make each year.? If you are in debt and cannot handle the repayments, you may want to look into debt negotiation. You may want to try doing this on your own; however, if you are unsuccessful, you will need to enlist the help of a third party in the form of a debt negotiation firm.
You must be very careful in choosing the company to represent you, as some arrange very little debt negotiation for the fee you pay, and other negotiators may actually hurt your credit score. Make sure to have them explain the negative effects of debt negotiation, as well as their timetable. Also, ensure that you receive a written privacy notice from your debt negotiation firm, and be sure that they are able to satisfactorily answer all of your questions.
Debt negotiation leads to debt resettlement, which is more advantageous and preferable to bankruptcy. If you declare bankruptcy, it stays on your credit report for between seven and eleven years. If you qualify for debt negotiation and settlement, you may be able to: reduce certain debts by an average of 50 per cent, save money, reduce or cancel collection calls, improve your debt to income ratio, usually repay your debts within four years, and make less of a negative impact on your credit history.
Usually, you will be contacted by a debt negotiation company. They will arrange for you to be able to stop payment to your lenders. Instead, you will begin making payments to their debt negotiation company. Once a certain percentage is saved up, the payments will be transferred to your lender. Not only will the debt negotiation firm help you save money on your debt repayment, but also they add the convenience of only having to make a single payment to them each month instead of having to make multiple payments to multiple creditors.
Debt negotiation companies often do business on the following types of debt: credit cards, personal debt, unsecured loans, medical bills, store cards, and business debts. To find out if you are eligible to be helped by debt negotiation, you will have to answer a few questions, such as: how much total debt you have, why you are in such a position, how much you make and spend monthly, and how much you feel you can repay per month.
Remember, however, that before or during debt negotiation, it is wise to stop using your credit cards, make payments higher than the minimum, call your credit card companies and ask for lower interest rates, spend less, look for ways to increase your income, and maybe consider consolidating some of your loans.