Jul 10
30
Wipe Out 50 % Of one's Debt – Significantly Reduce Credit card debt Without having Filing Bankruptcy
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When an individual goes under huge debt which he’s unable to pay off, it not only poses a huge risk for the person but also for the creditors or lenders as they are afraid of losing all their money. When a person files for bankruptcy and his petition is passed then the creditors stand no chance of ever recovering any part of their money. Therefore, programs like debt settlement and debt consolidation and also, credit counseling works as well for them as it does for the debtors.
When you contact a credit counseling agent they usually ask a few questions ,try to understand the cause of your debt, look at your finances and decide whether you are capable of paying back your debt or not. Many credit counseling companies are free but, because they need to earn monetary profit too, therefore they officially work for the creditors. Therefore, this is very important to know that they do not reduce your debt amount in any way; instead they negotiate the rate of interest reducing up to 50% as generally it’s the rate of interest that makes the monthly installment difficult to pay. A lower interest decreases the monthly installments and makes it easier to wipe off the debt. The credit card companies will take the solution readily because they know that by not doing so you may default on the entire amount.
Debt settlements work in a slightly different way. They not only try to negotiate your interest rate but also try to reduce your net debt amount by negotiating with the creditors legally on your behalf. Such negotiations usually result in your total debt reduction by up to 50%. Thus opting for bankruptcy is not always the best option because it not only takes time to proceed but also poses a future problems your credit score is badly destroyed. In such situations, debt councilors prove to be a blessing in disguise for both creditors and debtors.
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