What is Debt Negotiation?
Debt negotiation works to mediate between the creditor and debtor. To better help you with negotiation I have reviewed over a hundred companies.
A couple of different solutions to financial troubles exist; however, the first thing you often need to do is debt negotiation. As a debt relief solution it begins the process to reduce your financial troubles to a more manageable situation. It can also solve them completely depending on the effectiveness of the negotiation. Quite often negotiation is only as effective as the mediator. It behooves you to find the company you can trust and work with for the best results with negotiation.
Before launching into a complete breakdown of what debt negotiation is, it is imperative to discuss what I do.
Best Company for Debt Negotiation
I examine companies like http://www.nationaldebtrelief.com. National Debt Relief is a debt negotiation company because they will provide you with counseling, negotiation, settlement, or management options. This company offers you settlement of all creditors at once instead of piecemeal to make it more affordable for you. The point is I review companies offering negotiation so that you can find a trusted company, and one that has definitely been vetted to a very high standard.
Later I will talk about two other companies offering negotiation to you, but first it is important to examine your solutions. Negotiation is where a mediator will speak on your behalf to creditors. They will know exactly what you can afford to do based on your current financial situation. They will work to reduce the debt you owe in order to help you pay it off. They can do this in a couple of different ways when it comes to negotiation. They may first try to reduce the debt to a lump sum you can afford due to savings. If this doesn’t work they may offer a consolidation loan as a means for better debt negotiation.
You see, a creditor wants to get their money so they are willing to take part in debt negotiation. If you file bankruptcy it will be hard to get any money from you to pay off your financial burden. Yet, if they talk with your mediator, there is a very real chance during the negotiation process to obtain anywhere from 30 to 80 percent of what you owe them. They will try to gain as much of the money you owe as they can. Your mediator will be on your side in the debt negotiation to make as good a deal as they can.
Settlement can happen after debt negotiation. The amount has been reduced so now the time has come to settle the financial burden, meaning to close it out. You will pay the lump sum in full that was promised during the negotiation. At this point the settlement is complete and the creditors can no longer ask you for the full amount of the money originally owed. They have agreed during the negotiation to settle for an alternative amount.
Consolidation loans can often be used in debt negotiation proceedings. The creditor does not need to know where your funds are coming from. Rather, they just care that you will be returning at least part of what you owe. The negotiation company will sit down with you before they mediate. If you have no savings or very little, they may offer a consolidation loan. This loan will be offered at an interest rate and monthly payment you can afford if all your debt is paid off save for the consolidation loan. In other words, the loan replaces the financial burden and since the debt negotiation happens the amount should be reduced from the original amount.
The amount a negotiation company is willing to offer in a consolidation loan is based on what you can afford. During mediation the negotiator will try to reduce the amount to as low as possible, even lower than the maximum amount they are willing to give you in a consolidation loan. At the end of the negotiation you may need to use what savings you have plus a small loan. It at least solves the issue and makes the debt negotiation worthwhile.
http://www.curadebt.com is the second company I usually recommend for debt negotiation. It is an information and fact site, along with a place that offers credit counseling and settlement. It is a great company because they have negotiation in place in which their negotiators have spent a lot of time forming relationships with some of the top creditors.
http://www.debtconsolidationcare.com is another company that works closely with credit card companies. They endeavor to reduce your credit card balance through debt negotiation to make it easier to pay off the cards with a lump sum or consolidation loan.