Want the Hidden Truth about Debt Settlement Programs?

Yesterday I wrote a post on debt reduction. Today I wish to continue that conversation and share a bit more about how this process can help you.

According to what most of my clients are saying, I can tell the real issue with so many who are facing foreclosure is that they just don’t have enough money to pay their bills. You do want to start making more money per month as well as find legitimate ways of spending less? Isn’t that the real goal?

Are you really committed to that? Well then know this.  I am committed to helping you achieve that exact goal. And no matter what your situation may be I’m confident that you can create for yourself the kind of financial life you are seeking.

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Some of them will really transform your life. I am constantly updating this site and either gathering or creating more and more resources products that I’m sure you will find very useful. Don’t miss the opportunity to take advantage of our current free e-book and foreclosure report.

I will send it to you completely free when you sign up in the opt-in box at the top right hand corner of the blog at Foreclosure Doctor Online Okay now let’s talk briefly about the hidden truth about debt settlement programs.

The first thing you need to know is that this option is really not for everybody. If you are really concerned about maintaining a healthy credit score in the present moment then I strongly encourage you to consider other options.

Many have experienced a drop in the credit score simply by engaging in one of these debt settlement programs. And new creditors will see that you have enrolled in a debt settlement program and this for some potential creditors will be a red flag that says “Stay Away.”

So what constitutes a debt settlement? Well to put it simply debt settlement is a procedure designed to get rid of an outstanding debt for less than what you actually owe to the creditor.

In other words you promise the creditor that you will pay a lump sum of money that is around 40% to 60% of the actual debt if they agree to close the account and the file and not seek collection on the balance. For many this option poses many ethical questions or concerns.

The question is often raised, “Why should I not pay the full amount of my debt? Why should I even desire or seek for a way to escape paying all that I owe? Well the answer to this question is very personal. So I’m not going to stand in judgment over anyone who has used or is contemplating the use of a debt settlement program.

The debt settlement plan will begin with you stopping all monthly installments to your creditor and saving a minimum of 50% of the total debt owed. At that point you would want to start negotiations with the creditor to ask for a debt settlement agreement.

But what assurance do I have that creditors will accept the reduced payment? Accepting a debt settlement plan proposed by you is totally up to the discretion of the lender.

However there are certain things that you must understand in order to get the best results from any proposal you put forth.

The whole philosophy behind what makes this strategy work is that creditors usually do all they can to recover default or charged off loans in some way or other.

This costs money. If you offer a debt settlement program then the lender does not have to spend that extra cash in collecting that which you owe.

Most times they also have greater confidence that you are trying to pay them and so they won’t sell your account at a lower price to a collection agency. Therefore a reduced payment is usually more than what they would get if they were spending money on debt collection on your account.

Can I start a debt settlement program myself and if so how? Many have been asking this question and so this is a really good sign that most who are in debt are well intentioned and good. They do deserve another chance and paying off debts is a great way of starting that.

If you feel at ease talking to your creditors you certainly may have that conversation with them yourself. However if you do not feel comfortable then you might want to explore the services of a debt settlement company.

They will represent you completely with your creditors and present your plan. Now just because I’m saying that you can negotiate a debt settlement yourself doesn’t mean that you will find it easy to do so. Most creditors know that they can create more pressure on the consumer to pay a debt in full if they do not enter into conversation about debt reduction with the.

You do understand why they would want to keep such negotiations about a debt settlement program between you and a settlement company. Most debt settlement companies have much experience and know how to approach and deal with collection agencies.

What are the three main benefits of Debt Settlement?

Number one, you get more time to pay. Most debt settlement plans are created for a extended period of time. Often times it is easier to get a creditor to delete a negative listing after you’ve payed down a percentage of the debt over time and met the demands of a debt settlement plan.

Number two, you can squelch rude and harassing creditor calls. By successfully negotiating a debt settlement plan either on your own or through a debt settlement company you can really do much to get creditors off your back.

And number three, you can pay less. That’s the whole entire purpose of doing a debt settlement plan. You actually would end up paying less on the delinquent account. Most times it would be 40%–60% of what you actually owe.

Debt Settlement Programs are definitely something you should consider.  I encourage you to study and research whether or not engaging in a Debt Settlement Program is something that will work for you.  One that I was reading about earlier today can be found at a site called Smart Debt. Check it out and see how it can benefit you.

All the best!

The Foreclosure Doctor (Online)