I'm in debt and have lost my job, what to do? (part 2)
I'm in debt and have lost my job, what to do
? (part 2)
Consumers that have unsecured debt $10,000 and above can turn to debt settlement for debt relief in less than three years.
How much does it cost?
Debt settlement or credit card debt consolidation companies charge 15% of the total debt amount or 20-25% of the settlement amount. And those are the industry standard. Different debt settlement companies, though, have different fee structureswhich were over ridden by the recent debt settlement ruling of NO MORE UPFRONT FEES, until after a debt has been settled.
If you think 15% of the total debt amount is quite steep, it's because debt settlement programs require for c0nsumers to have at least $10,000 worth of unsecured debt. Any amount lower than that might not be taken by the creditors/collectors as "settlement worthy." Balances that are lower than $10,000 are deemed as payable in full and not less than the full amountwhich is what debt settlement is.
There is another debt relief program that can help consumers whose debt amount is lower than $10,000 and it's credit counseling/debt management plan. This debt relief requires for the consumer to be current in their payments, otherwise, it would be more difficult for the counselors to get the original creditor to agree to negotiate the interest rates terms. Credit counseling/debt management plan is the negotiation of the interest rates (to be temporarily stopped, payment terms to be lowered and/or extended) so the consumer can stay current on payments and get at the principal amount of debt, at the same time.
While debt settlement is all about negotiating the entire balance down to more or less half and have the creditor/collector consider that as full payment.
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