Debt settlement is the best option if you have resorted to alternatives like credit counseling but did not see any result. It is a good solution if you have been thinking about filling for a chapter 13 bankruptcy to solve your debt problem. You should hire a third party debt settlement company instead of trying to make the settlement offer to the creditors yourself. This is because it takes a lot of hard work to persuade the creditor to agree to the settlement amount.
The creditors will try to make it sound like it is very difficult for them to agree to the lower settlement amount. You must be very persuasive and patient with the creditor otherwise you won’t be able to successfully get a settlement. If you are thinking about directly negotiating with the creditors on your own, you have to be certain that you possess the necessary negotiation skills. You may save a lot of money by negotiating the settlement yourself but all these will be a waste of time and energy if the creditor refuse your settlement offer in the end.
There is a higher success rate if you hire a professional debt settlement company. The firm has professionals with years of experiences in settling debts with creditors so they know the best strategies to use in reaching the settlement. The advantage of outsourcing the debt settlement to a professional company is that you don’t have to do all the work yourself such as making calls to the creditors and waiting for the customer service agent.
The professionals just take one look at your creditors and they know which ones are likely to agree to the settlement offer. They also know the right amount they should ask for in the settlement during the negotiation. Through the debt settlement program, you will be able to develop a discipline to set aside some money every month for making the lump sum payment. The payment you make towards the savings account will include fees for the debt settlement service. The fee is at least 10% of the settlement.
It is important to go through their policies and completely understand the fee structure prior to signing up. The debt settlement company do not have any right to collect fees unless they have already settle the client’s debt, have a written agreement in place and that the client has already send in at least one payment for the payment of the debt.
The downside of hiring a debt settlement firm is the fee that you have to pay them following the settlement. Besides, the debt settlement firm probably won’t be as enthusiastic as you in reaching a lower settlement and they also usually won’t offer any legal protection if the creditor sue you for not making payment. However, all these risks can be reduced if you hire a reputable debt settlement company that has a track record of helping a high percentage of their clients reaching the desirable settlement amount.