subject: Debt Settlement Facts – The Truth About Debt Settlement [print this page] Debt Settlement Facts The Truth About Debt Settlement
Debt settlement finds a way to negotiate with the lenders to waive off certain percentage of the outstanding balance with the borrowers. A portion of the amount is paid off at an agreed upon settlement amount. This process can be very effective if a third party settlement services company is employed. They negotiate hard with the companies to eliminate between 40-60% of the original balances. A shocking revelation says that last year alone there were 1.5 million bankruptcies filed. It is a serious problem for the lenders as it is their business to reap profits and not bankruptcies. They do business in the market and hardly gains because of the bankruptcies. Lenders do not get even a single penny when bankruptcy is filed. Hence, they find that negotiating with adebt settlement company might find fruitful results in getting back at least the 50% of their principle amount.
With the worst affected economy, the only way to find a solution for paying the lenders have been to borrow from one creditor to pay off the debts to another creditor. This process will face its eventualdeath when the borrowers run out of their credit lines and they find it very difficult to repay the monthly payments. Debt settlement will take about 12 to 36 months of time for the entire process to get over. Those companies will contact the creditors and will explain about the representation in favor of the debtors. The lending companies are not allowed to contact the borrowers anymore. This is a very good way to stop the creditors from harassing their consumers. Every single communication has to be done via thedebt settlement company and also done legally.
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