Are you looking forward to negotiating a debt settlement deal with your creditor? Do you want to understand how debt settlement works? You are at the right place and you will shortly come to know the internal dynamics of the method of settlement.
Settlement as a method of debt elimination will require you to have an overall debt of $10k or more. This is because of the fact that $10k has been set as the minimum requirement for settlement by law. The next thing that you will have to do is to make sure that the debt is consolidated in one place. This is needed to ensure that the cost of settlement remain low and that the settlement is completed in the minimum possible time.
Once these two conditions are fulfilled, you are advised to hire a professional debt settlement company. This is because of the fact that a professional settlement company will have the complete knowledge of the financial system present in the country and will know exactly how to deal with the creditors.
The negotiator from the company you hire will ask you to go delinquent. This is necessary because it is important to prove that you are in financial trouble. Once you stop paying the creditor, it will wait for 12-16 weeks and then sell off the debt to a collection agency for as little as 20-30 cents on the dollar. The negotiator will know exactly when this happens and then contacts the creditor directly.
The negotiator offers a better deal of 30-50 cents on the dollar and also threatens the creditor that you will be left with bankruptcy as the only option in case the creditor rejects the deal. The creditor will never want this to happen and will accept the deal on the basis of the fact that the deal will mean 100% ROI for the collection agency that the creditor hired. The creditor will then eliminate at least 50% of the debt that you have and you will have to repay the remaining amount to the creditor in one single payment.
This is the complete dynamics hidden in the womb of debt settlement which will help you to eliminate the unsecured debt that you have.
Source by Percy Wilson