Learn What A Debt Negotiation Service Can Do For You?

   If you are reading this page more than likely you may find yourself stuck in a debt situation that may seem pretty overwhelming.

   Overwhelming to the point that you understand by doing nothing about it your financial situation is just going to continue in a very negative direction. 

   But before I explain how debt negotiation works let me first explain the horrors of credit card debt. For starters the credit card industry has this ingenious payment scheme, called the monthly minimum payment.

   Unfortunately most credit card holders become entangled in this spider’s web. Minimum payments seem easy at first but they are designed to take over thirty eight years on average to payoff; and making the credit card company huge profits (interest payments) during the process. If you take that long you will end up paying over four times the original balance you borrowed in interest payments alone!

   This projection is based on reasonable interest rates (below 10%) but now in 2009 with universal default writing into your credit agreement Americans in debt find their interest rates well above 20%; this can easily double the number of years in debt and interest paid.

   Obviously being stuck in this situation can be quite the burden, particularly when all you can afford to pay is the minimum. So what can you do? Well for many the only reasonable option would be to enter into debt negotiation. 

   Debt negotiation is a process where one (usually a professional debt negotiator) negotiates a settlement on the amount of debt that you owe. In many cases resulting in quite a substantial amount of savings, finding yourself saving up to 40% or more of what you owe is not unreasonable to expect.

   Plus you can look to have your debts paid off within a few years, saving precious time as well. However the real savings in debt negotiation come from when you are out of debt and no longer paying interest on monthly minimum payments.

   Using 40 cents on a dollar as an example on a $10,000 debt you will save around $4,000 off of what you currently owe, however if you continue to pay just the minimum payment schedule you may have paid back over $40,000 through the course of time, now the true savings will be $34,000. Understand this is a very important fact many people overlook when considering debt negotiation.

   Now debt negotiation isn’t all rosy. There is one fact that remains, in order to achieve a negotiation you must go into default on the bills you’re looking to negotiate. For some people this isn’t an issue they are already falling behind.

   However for others who are current this may be of some concern. And the concern usually comes to how your credit will look. There is no doubt that in the beginning of this process if you are current your credit will take a hit.

   Once you begin settling your debts that will turn back around, because according to MyFico 30% of your credit score is based on the debt amount owed. So once they are paid off you can start re-building your credit. And besides if you are deep in credit card debt your priority should be on how to get out of credit card debt, not how to accrue more debt in the future.

   So back to the purpose of this writing, what can a debt negotiation service do for you? Well the main reason for hiring a debt negotiation service is too have a professional deal with the creditors on your behalf and to secure you a good settlement, helping you to achieve your goals of becoming debt free.

   BUT there are many debt negotiation companies out there, how do you know which one will be right for you.
Here are three things that a debt negotiation service should have.

1.  For starters they should be registered and accredited with the BBB (Better Business Bureau) and have a good clean record, by clean meaning that in the past 3 years there should be few to no complaints. Many people may not totally realize what they are doing before getting started or are expecting something very different so if they complain it’s important to pay close attention to the type of complaints, too many complaints that are similar can easily show a pattern. Last if they had a complaint or two make sure it was satisfied to the BBB standards.

2.  They should have testimonials from previous satisfied clients. By law testimonials need to have all documentation backup to who the individual giving the testimonial. This doesn’t mean that you can request that info but the Attorney General can and does when they investigate a company.

3.  They should be able to provide you with recent settlement letters from creditors/collectors, so you can see the kind of debt settlements they can achieve. A good debt negotiation service will have hundreds to thousands of new settlement letters each month.

4.  The bottom line, what does this mean? Basically you need to compare apples to apples not apples to oranges and the later is what a vast majority of shady companies will do. What you need to understand is your “bottom line”, in the end how much are you going to outlay in real dollars to get out of the credit card debt trap!

     Commonly a company only interested in signing you up will tell you that they can save you 60 to 70% or more! This sounds great to the desperate unsuspecting person in debt but is that the bottom line? No! They usually neglect to include the service fee and unless you asked they won’t inform you when giving you an estimate.

      Saving between 40 to 50% of your current debt including paying the debt and the company fee for the service is far more realistic and honest. If you are not satisfied with that type of savings than you will need to attempt this on your own. Debt negotiation is not as simple as it appears, like selling your own home, there is a lot of pitfalls when doing this on your own and could cost you more in the end.

If these things all fit into place then the company should be able to help you turn your current debt situation into a thing of the past. 

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