Is debt negotiation worth it? If you are currently trying to work off crushing debt, the whole ordeal can seem like a very overwhelming task. Fear not, however, for one of the great truths in business is that everything is negotiable. Even in situations where the price or terms of the matter may seem immovable, it can be really easy to secure a discount if you know exactly whom to speak to and what to ask for.
What Is Debt Negotiation & Settlement?
Before deciding whether debt negotiation is the right option for you, it is important to understand what exactly the process entails. Debt negotiation usually occurs between a borrower and a creditor. It is a process which aims to develop a mutually agreed upon settlement on a debt that is currently held by a borrower. Debt negotiation is a strategy commonly used by borrowers who find themselves unable to repay their debts. By means of debt negotiation, the borrower can avoid bankruptcy and the serious financial consequences that come with it.
The process of debt settlement usually begins with the borrower, or a debt negotiator company working on behalf of the borrower. The borrower, or company offering debt negotiation services, drafts a proposal to the creditor detailing how the debt shall be dealt with. Once the creditor receives and considers the proposal, they can either choose to accept, reject or negotiate further.
Due to the fact that all participating parties are required to agree on the same terms, debt negotiation can be quite a lengthy process. Though there is a possibility for varying outcomes, if done right, the borrower and creditor can come to an agreement that a debt will be reduced or eliminated, or create a new arrangement to repay the sum.
Why Debt Negotiation Could Be Right for You
Being in too much debt to handle is never anyone’s dream. However, if you’re ever in a situation where you’re finding it hard to stay on top of your credit card repayments, loan repayments or other financial obligations, the process of debt negotiation can yield some lasting benefits. Some of these include:
Get a Break From Debt & Make Repayments Faster
Debt settlement alleviates a lot of the stress that comes with being in this unfortunate predicament. Debt settlement means that you end up paying less on the amount owed and, if done right, can resolve your financial problems quicker than alternate routes. Roughly speaking, a legitimate debt settlement program could allow you to pay off your debt stress free.. If you opt for other options like debt consolidation, bankruptcy or counselling repayment programs, you may find the process seemingly never-ending and draining in the long run, unlike with debt relief.
When you find yourself unable to repay your debt, claiming bankruptcy is a route that many settle for. However, this can have several repercussions as a bankruptcy filing remains on your credit report for 7 years. There is a chance it can follow you even longer since credit cards, loans and even some job applications do background checks to see if you have ever filed bankruptcy. This can have a decidedly negative impact on your day-to-day life and can be entirely avoided if you opt for debt negotiation services instead.
Avoid Debt Being Charged Off or Sent to Collections
With debt settlement, you can avoid your debt being sent to collections or being charged off, which is when it has been sold to a debt collection agency. While debt negotiation isn’t a miracle pill for all your financial problems, it will help stop all those pesky calls from debt collectors once an agreement has been reached. When you are free of constant calls from collectors, you will be able to enjoy some relief and focus on the matter at hand without being harassed regularly.