Steps Involved In The Debt Settlement Process

Falling in to a debt and finding one self in a financial mess is definitely not something uncommon – owing to the varied list of responsibilities and commitments that one has to deal with in his or her daily life. This is where one tries to find solutions that will help them to come out of the financially messy situation in their life. One such quick and proven solution is to associate with the debt settlement company – they act as the perfect medium between the creditor and the debtor in order to find the best solution that benefits both the parties.

Here is what one needs to do

Before choosing to go with a debt settlement company, one can actually look up for a debt settlement calculator that will give you an idea of what could it be when you opt for a debt consolidation and how many years you would be requiring in order to clear off your debt entirely.

Once a consumer has chosen the debt relief company that they want to work with, the first step involves discussing a person’s specific financial situation.  This is important as the amount owed and a person’s capacity to pay off their debt will have to be worked out. This could be a topic of debate; however, a debt settlement and relief company will be of great help to both the ends.

The next step is to decide how the debt settlement will work.

One approach would be to offer a lump sum amount to the creditor.  A set amount will be decided and it will be saved to pay off all debt once and for all. The other method is to set up a new settlement schedule after all the debts have been consolidated and a specific amount is paid monthly, until all the debts are paid off (check for the same on the debt settlement calculator).

This will require an in depth planning and negotiations with debtors to agree on a settlement amount before the final number is agreed upon.  This amount takes into consideration the amount owed by the debtor, his or her monthly income and is decided only after considering their basic living expenses.

Always try to go by the words of the debt relief expert that you are associated with. What debtors have to remember is that creditors are generally wary of setting up such agreements.  What they have had to deal with is the fact that a person has stopped paying their due bills and they have had to harass the person to get their money back.  It is best for a customer to stay quiet and put aside money in an FDIC insured account set up by a debt relief expert.  There are quite a few good debt relief companies which help people get their finances back on track.

As the repayment fund is being built up, debt relief companies actively negotiate with creditors on the debtor’s behalf.  They work at showing reasons why a consumer is unable to pay the entire amount and try to set up new payment terms. In any case, this does not harm the creditors point as well.

The debt settlement process is ideally done in 3 to 6 months after a customer has stopped paying their bills to the creditors.  This is considered the ideal time as creditors generally charge off debt – this means that they have written the debt off and have gotten a tax break for the amount.

So, if you are one who is going through such a financial mess, here is a chance for you to get back on track instantly.