Are you eligible for the debt settlement program?

You are eligible for a debt settlement program when you know that your credit score is gradually dipping as you are falling behind on payments. As long as you are being able to shell out the minimum payment, it should not be a problem for you and even creditors will not trouble you to make the payments. But the moment you stop making payments altogether, be sure you are in for some trouble in the near future.

Why will creditors agree for debt settlement?

Through debt settlement, you will be able to pay off your unsecured debts. And in most of the cases, your creditors will agree due to the following reasons. They are as follows. And if they agree, this is perhaps the best time to grab the opportunity of availing debt settlement and getting out of debt in due course.

ü  The creditors usually feel that instead of losing all the money, it is better if they are able to get at least some. Moreover, you will not be able to pay even a fraction of the outstanding balance if you file bankruptcy. So, this is one of the reasons why creditors agree to settle debts.

ü  If not the entire amount at least a lump sum payment will be received by the creditors and this is in fact much better than receiving payments in smaller amount.

ü  In order to recover the money, oftentimes, creditors hire collection agencies. For the services received from the collection agencies, the creditors have to make a handsome payment to them. So, if creditors agree to a debt settlement plan, they will be able to save the money that they had to pay to the collection agency.

When will you qualify for a debt settlement plan?

If you have a steady flow of income, you are not being able to meet your financial obligations, you are confused as to which credit card payment you ought to make first, you are finding it difficult to make ends meet and you have to borrow money from someone else to clear your other debts. And gradually you sink deeper into debt. This is the time when you really need to cling on to a debt settlement program.

So, if your situation is similar to the ones that have been mentioned above, you are likely to qualify for a debt settlement program as the creditors have mind set as mentioned above.

A debt settlement firm will understand your prevailing financial status and ask you details about your debt accounts. Once they are through this process, you will accompany the debt settlement firm officials to creditors. The firm will convince that owing to your financial hardship, you were not able to make payments and negotiate with the creditors so that you have to pay less as compared to the total outstanding balance.

It has been observed that approximately 70% to 80% of the debt amount is reduced provided the negotiation is done well. However, the negotiation percentage is no less than 30% but may vary from one creditor to another.

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