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Debt negotiators can help those in financial trouble negotiate settlements with creditors, but it’s important to choose the right negotiator. Unsecured debts are good candidates for negotiation, and a lawyer or credit counseling service can assist with complex legal and tax issues. Negotiations should be done via correspondence and a debt negotiator can help determine which debt to settle first.
When someone is in serious financial trouble but doesn’t want to declare bankruptcy, a debt negotiator may be the best answer. Just as it is unwise to act as a lawyer, it is unwise to attempt to negotiate a personal debt settlement. The debt negotiator deals with the debtor’s creditors and negotiates a reasonable settlement. It is advisable to contact a debt negotiator if you are dealing with multiple creditors, dealing with an extreme debt load, or if there are tax implications.
There are two types of debt. Unsecured debt includes medical bills, credit cards, personal loans, and student loans. Debt for tangible assets, such as a house or car, is secured debt. Secured debts cannot be settled. If an individual defaults on a secured loan, the lender accepts the item against which the loan is secured. Unsecured debts are good candidates for debt negotiation.
A lawyer is the strongest debt negotiator. Using a lawyer as a debt negotiator is advantageous if complex legal and tax issues are involved. Credit counseling services can also provide assistance with debt negotiation. It is crucial that the debtor feels comfortable with the debt negotiator. Open communication between them is vital.
The debt negotiator will create a timeline for the negotiation. Not all debts will be negotiated at the same time. There is a benefit to dealing with one debt at a time. Once the first debt is settled, it is recorded on the credit report as fully satisfied. The full satisfaction statement increases the chances of getting a better settlement with the next lender.
A debt negotiator is experienced and equipped to determine which debt to settle first. Also, as the debt negotiator is not personally involved, he can look at the big picture. He understands the goal and takes action to achieve it without getting emotionally involved. His guidance is invaluable to the debtor, who often feels overwhelmed by crushing debts and pressures from creditors.
Most debt negotiations must be done via correspondence as opposed to live interaction. This provides a paper trail documenting all interactions between the debtor and creditor. Once an agreement has been reached, this can also document the specific details of the contract. All correspondence must be sent by trackable courier.
There are many reasons why good people find themselves in crushing debt. The services of a debt negotiator can help an individual move forward with a plan and a brighter outlook for the future. Credit records will show good faith effort to pay debts and creditors receive a portion of the original obligation.
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