Debt Settlement - Where to Look For Ideal Debt Reduction Solution
Debt Settlement - Where to Look For Ideal Debt Reduction Solution
With the current economic situation where many people are finding themselves in a debt trap, debt settlement has become a very familiar term. Debt settlement is applicable to any kind of unsecured loans (like personal loans, credit card debts, student loans, unpaid medical bills etc). When a consumer fails to pay his installment for a few months the creditor sends a reminder in the form of a letter or, a phone call. This is the point when debt settlement begins.
A consumer may choose to settle the existing debt either by him or, herself, or, may look for a professional to carry the settlement procedure forward. The professional help comes from the debt settlement companies who offer ideal debt reduction solution to the person concerned. One can also check with the debt relief network which provides a list of authentic companies that offer relief from debt.
The debt settlement companies are experts in settlement procedures. They know the laws and the tricks that the creditors play to increase the total amount payable by the debtor. Any kind of malpractice that a debtor may fall prey to, can be easily identified and dealt with by the Settlement companies. They can also stop the harassing calls made by the collection agencies.
These companies are more persuasive and can negotiate well with the creditors to bring down the total debt amount. Sometimes the entire amount is reduced by 50% or more. But, a person should be careful in choosing the settlement company. There are many fraudulent agencies that can take a debtor for a ride.
A consumer should be aware of a few vital points of debt settlement before commencing negotiation with the creditors. The creditors (generally the collection agencies) tend to charge more than they are legally allowed to taking advantage of the ignorance of the debtor. Therefore one should never agree to pay the full amount or, more even if the creditors are being flexible with the time of payment.
The debtor should consult the statute of limitation (SoL) before settlement. If the SoL for the particular debt is over then the creditor cannot charge a penny from the consumer.
Debt validation is a right of the consumer. The creditors should be able to validate the debt, and should be able to prove that the concerned debtor owes them the loan. If not, then the debtor can legally refuse to pay. These are debt reduction solutions are legal and are capable of reducing the debt by the entire amount.
Apart from debt settlement there are many other debt reduction solutions. Debt consolidation is one of them; where different debts owed to different companies is brought together and paid off at one go.
Home refinance is a great way to reduce and control debt. In this case a loan can be taken against a house (if owned by the debtor), and this loan can be used to pay off all the debts. if the debtor chooses to pay the loan over a long period of time then he can save a lot of money too.
Debt settlement companies are widely available in just about every state however some are just flat out more experienced than others in debt negotiation. That's why it's so important for consumers to use debt relief networks. These networks qualify and only accept the best performing debt settlement companies.
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