Do Debt Settlement Programs Actually Eliminate Your Debts?

June 3, 2010 - PRLog -- Let us start off with a general question, "do debt settlement programs actually eliminate your debts?" The answer to this question is a definite YES! Debt settlement programs have gained popularity in the recent times after the US economy has been hit by recession. As thousands of Americans found them in a position of joblessness, they are now unable to repay the debts that they have.

What are the consequences of default? The debtors start filing for bankruptcy and at the end of successful bankruptcy filing, they see that their credit score goes down and they lose their credibility for the next 7-10 years. The creditors on the other hand lose their liquidity and fail to manage their costs. They lose their financial equilibrium and approach bankruptcy! The economy again gets back into recession. This situation is not acceptable. The best way to handle the situation is to go for debt settlement. As we already said that debt settlement programs work and they actually eliminate your debt. In the remaining segment of the article we will see how it works.

Settlement programs will require you to have an overall credit card debt of $10k or more and that the debt must not be scattered over a large number of cards. If you, you need to consolidate the debt and bring it under one card by balance transfer. The card you chose must have the minimum rate of interest. Once these two conditions are fulfilled, you must hire a professional debt settlement company. The professional negotiator from the company will advise you to stop paying the creditor in order to prove that you are in a financial trouble. Once you do that, the creditor will wait for 90-120 days and then sell off the debt to a collection agency at a rate which is as low as 20-30 cents per dollar. The negotiator then offers a deal of 40-50 cents on each dollar and threatens the creditor that the consumer will file for bankruptcy if the lender refuses to agree.

The creditor will generally agree because it does not want the consumer to file for bankruptcy and also because of the fact that the deal will mean 100% ROI for the collection agency and thereby eliminate at least 50% of the debt that you have. This is how a debt settlement program actually works and helps you to get out of debt.

If you have over $10,000 in unsecured debt it may be a wise financial decision to consider a debt settlement. Due to the recession and overwhelming amount of people in debt, creditors are having no choice but to agree to debt settlement deals. To find legitimate debt reduction help in your state and get free debt advice then check out the following link.Free Debt Advice
(http://www.debt-settlements.com/)
contact us for free debt advice = 8886916918

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Www.debt-settlements.com is a matchmaker in the debt settlement industry. They have paired up thousands of consumers up with debt settlement companies who are most likely to get consumers the best deal.
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