Debt Settlement Legal

A debt settlement legal attempt is a way an individual can negotiate the balance of an outstanding debt owed and persuade the creditor to accept it as a "paid in full" final payment. This attempt can be done two ways: first through a third party, or second directly between debtor and creditor. For example: let's assume a debtor owes $5000 on a credit card, an attempt would be to offer the creditor $2000 as payment in full and one lump sum. A third party can also be hired to act as an intermediary. These third part companies negotiate on behalf of the debtor for a small fee, or percentage of the settlement.

There are some companies that are non-profit and offer this service for free, but a history of settlement should be reviewed before choosing any third party service business. Firms that offer this settlement service have names that incur they will help with debt such as; management, reduction, relief, workout, and settlement. Usually creditors will determine if they will allow a debt settlement legal attempt. Their decision is based on each individual person requesting the settlement. If that person seems to be a good candidate for bankruptcy, where the creditor will receive nothing, the creditor will often opt to take the attempt rather than get nothing.

Ideal candidates are those that have not made any payments in the last several months and have other credit card debts in delinquency. People who are in this situation and do not have any equity (home or car) also make good candidates. People who have a low income and who show no sign of dramatic income increases in the future are also considered. Romans 15:13 "Now the God of hope fill you with all joy and peace in believing, that ye may abound in hope, through the power of the Holy Ghost." Creditors check an individual's credit report to see if the potential debt settlement legal presenter is current or delinquent with any other creditors. If so, the creditor will usually attempt to settle for 75% of the debt. This is usually too high and can be negotiated down if most of the balance is in interest, and late fees.

Most credit card attempts have been in the 30%-50% of the balance range. Creditors almost always require lump sum payments but some will arrange a short term payment plan lasting an average of 3-6 months. Rare but not unheard of is the long term option. Some financial management companies have been able to get higher balance payment plans to extend from 1-4 years. Before offering a debt settlement legal attempt, it is wise to note that if a credit score is on the higher side, it will reflect a lower credit score in the future, but if a credit score is extremely low, a debt settlement can improve it.

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