HOW TO REDUCE YOUR DEBT SUBSTANTIALLY WITHOUT BANKRUPTCY. Professional debt settlement is not just a phone call from a professional debt negotiator to each of your creditors. It’s a strategic process that takes some time while working through a series of steps. The end result is that your credit card companies having a clear understanding that they not only have gone too far in terms of cranking up their interest payments, late fees, over-limit fees and every other fee they can legally charge you, they are now willing to forgive all of that and more.
Here are the 4 steps for someone who is over their head in debt and yet does not want to file bankruptcy. (Or, nowadays, with more stringent restrictions on bankruptcy filings, cannot consider bankruptcy).
1. Stop Payment to Creditors: Instead, your monthly payments will be sent to a trust account where they will accumulate.
2. Say Goodbye to Collection Calls: You no longer have to deal with harassing calls from credit card collection agencies, as the Debt Settlement agency will take over that responsibility as part of negotiating your debt down.
3. The Professional Negotiation Process: As your payments start to accumulate in your trust account, the debt negotiator has some leverage to work with the credit card companies to forgive a portion of your debt and settle the account for less than what is currently owed.
4. Debt Reduction: After going through the debt settlement process, and not being able to intimidate the credit card holder into paying all the interest and fees, the professional debt negotiator reaches a settlement with the credit card issuer that is typically about 40-60% less than what was originally being demanded by the credit card companies.
This process takes time as the Debt Negotiator continues to work with the various credit card companies to maximize the amount of debt that is forgiven. By working for many clients, the Debt Negotiator has a keen insight into how far he/she can negotiate down your final settlement.
Once one debt is completely settled, the negotiator continues to negotiate an optimal settlement with another credit card, based upon the available funds in the trust account.
Depending upon the extent of debt, and the amount of payments going into the trust account, the settlement process may take 1-3 (or more) years.
Since most professional Debt Settlement firms are paid a commission on how much they reduce your debt, they have a vested interest in reducing your debt as much as possible. In other words, the more money they save you, the more money they will make (but the net result is an overall lower cost to the debtor).
To learn more about the details of debt settlement and find out if your circumstances qualify for debt negotiation services, click “Contact Effective Financial Solutions” for a free and no-obligation personal debt consultation.