Debt negotiation – Should I go for debt settlement plan or not?
Getting through a debt settlement method is one of the ways that you can get out from under the mound of debt that you have acquired over the years. Debt may be incurred in some ways other than just careless spending and poor financial planning. It can also be brought about by events that you have little or no control of like an accident in the family, a divorce, a health issue or a lawsuit.
It can also be because somebody breaks into your house and stole your money and jewelry. No matter the reasons why you are swimming in a pool of debt, you can begin relieving yourself from the stress of being in debt by going through a debt negotiation process.
Debt arbitration is also called loan forgiveness. It is a process wherein your creditors will accept a lesser amount as payment to your debt compared to its original amount. Most creditors are willing give you loan forgiveness especially if your debts are way past due.
However, getting loan forgiveness is not as easy as you think it is. You have to have a valid reason why you cannot pay them in the full amount that you owe them and you have to go through negotiations with your creditor in order to come up with an amount that both you and the creditor is happy about. You can do this on your own and approach each creditor. However, it is better to consult a credit counselor first in order to have an experience debt settlement negotiator in your side.
The first step after you seek help from a credit counselor is to enter into a debt management plan. Your counselor will compare your debt to your cost of living and income and will come up with the best amount that you can come up with each month that will go to your debt payments. The counselor will then present your case to each of your creditor and will do his best to convince them to accept your debt management plan.
You can also settle your debt through further loans. However, most banks and loan agencies will be hesitant to give loans to those who have bad credit records even if you have properties such as a car or a house as a collateral. The best thing that you can do is seek the help of an excellent credit counselor, come up with a good debt management plan and hope that your creditors will agree to it.