Getting the Best Resolution from Your Debt Negotiation
Smart people can get into big financial problems, but they know that declaring bankruptcy, although tempting, has far reaching consequences that just aren't worth it. These smart folks seek credit counseling or debt negotiation services to help them move forward. Like representing yourself in court, representing yourself in debt negotiations is fraught with danger. You aren't a professional negotiator, you don't have endless time and resources and frankly, negotiation is an uncomfortable and stressful proposition for anyone.
This is why debt negotiation services are so popular nowadays. Your representative will deal with your creditors, get solid and reasonable settlements and then all you have to do is make your prescribed payments, keep good spending habits and you'll be on your way to financial solvency.
Does Debt Elimination Arbitration Really Eliminate Debt?
Be wary of false promises that seem too good to be true when you are looking for debt solutions. All too often fraudulent services and businesses will advertise that they can completely clear your debt away through debt negotiation and arbitration. The truth is that bankruptcy is really the only way to erase debt and anyone who tells you otherwise may lead you into more problems than you already have. Debt arbitration means that each party in a matter has representation and that a neutral figure presides and provides a decision to which the parties must abide. There is no guarantee that a creditor will erase a debt, and really, why should they? If they can get something towards the money owed, they will. Debt negotiation and arbitration is a viable financial solution, but be careful of who you choose as your representative or service provider.
Surviving Debt Arbitration – Be Prepared to Compromise
Debt arbitration can be entered into voluntarily or ordered by a bankruptcy court. It can be stressful, like any negotiation, but in reality you'll probably be better off. Arbitration means that your creditor will have a spokesperson, as will you, and that a neutral figure will decide on the outcome of the dispute. In some cases, your representatives may negotiate directly and come up with a settlement between them. You should understand all of these proceedings and their consequences before you accept and offer. If a creditor makes a reasonable offer, keep an open mind. If you go into debt arbitration thinking your debt will be eliminated, you are sure to be disappointed, so make sure that your expectations are appropriately set. Additionally, if at all possible, try to have a professional help you through these proceedings. They will know what is going on at all stages of the debt arbitration process and can advise you as to next steps, what to expect, etc. At the end of the day, you are going to emerge with a solution in hand, so try to keep your chin up. The light at the end of the tunnel is starting to approach.
Debt Negotiation and Settlement Advice
You can find advice on debt problems from just about anyone. From family to friends, everyone has their opinions and most are not so qualified.
Remember that creditors want to collect their money and that it is up to you how much they will get. Because of this, be honest about your situation but don't give too rosy a portrayal. Elaborate on what got you in your predicament – illnesses, accidents, employment problems, etc.
Lawyers can be of assistance in debt negotiation and settlement, but remember that they do cost money. Unless you have extraordinary debts to settle, chances are that the attorney fees are going to be more than they are worth to you. At the least, consult with an attorney who can give you an analysis of your situation and advise you on what would be a reasonable solution.
Make sure that when your debt negotiation and settlement has been reached the creditor reflects your account as ‘Satisfied in Full' on your credit report. Anything less may harm your credit score and make your financial road a little bumpier in the future.
All of these are great tips for getting through a debt negotiation and settlement procedure. If you have more questions or want to be more prepared for your negotiation, consult with an attorney or credit specialist who can advise you further.
Finding Debt Negotiation and Settlement Services
Where do you find a responsible debt negotiation professional to represent you? You have a few options:
- Attorneys who focus on debt negotiation and arbitration. If you need bankruptcy counseling or a strong negotiator, you may want to start with a lawyer in your area. You can get a referral from your state bar association or through people you know and trust. If you have an attorney that you consult with regularly, feel free to contact them for a referral as well.
- Look on the internet. Go to your search engine of choice and type in “Debt Negotiation and Arbitration” and put in your local city or state. There are national and statewide programs available and since different states have different guidelines, find an expert in your area and go from there.
- Credit Counseling Services – These folks are professionally trained in finding debt solutions and giving smart, tailored recommendations specific to your situation. They can refer you to the right banks, financial planners, debt negotiators and credit services to help you repair your financial problems.
Debt Negotiation Services Work Best One at a Time
When you think of debt negotiation or just getting your finances in order in general, you probably want to get it over with as quickly as possible. The truth is that doing it one debt at a time actually yields better results. In this case, patience can save you money. The reason for this is that the settlement a creditor will offer you is based on your credit score, your history with them and the amount of debt you hold. If you negotiate your largest debt first, when you get to the second debtor, the first debt will be off your credit report and your credit score will be better and you'll get a better deal. As you move forward from creditor to creditor you are in a better and better position to negotiate. In this case, patience can save you money.
Debt Negotiation – Something is Better than Nothing
Debt negotiation is often regarded as a financial solution that satisfies both the creditor and the debtor. This is because the debtor avoids bankruptcy and a long term blotch on their credit report and the creditor is not out all of their money. Bankruptcy send a message to your creditors that they are never going to see the money they lent you and you are left with higher interest rates, poor credit and a shaky financial future. You have also borrowed money in good faith and it's your responsibility to pay that debt. Of course, bankruptcy is a necessary step for some, but make sure you are getting good advice from a professional before you move forward with such a drastic solution.
Differences Between Debt Arbitration, Negotiation, and Bankruptcy
What is debt arbitration and how does it differ from bankruptcy? Here are some basic differences between these two debt solutions:
- Arbitration and negotiation never become part of the public record, while a bankruptcy does. A bankruptcy will remain on your credit report for some time and is a legal document that is recorded with your state. Debt arbitration or negotiation results in settlements with your creditors and although your credit may look spotty for a short while, it will rebound more quickly than with a bankruptcy.
- How you pay your debts is a part of your credit report and your credit score. In the case of weighing bankruptcy and debt arbitration and negotiation, consider the following:
- "Paid as Agreed" on your credit report indicates that you fulfilled your contract to your creditors.
- "Paid" on your credit report indicates that the debt was paid through settlement or some other means.
- "Defaulted" indicated a bankruptcy or complete loan delinquency.
Both of these options have their pros and cons. This is merely a snapshot of some of the differences. You should contact a professional when considering either of these options.
Getting a Reasonable Settlement in Debt Elimination Arbitration
Fixing a problem with debt is scary and stressful and often you have so many options, the situation becomes even more complicated once you begin. Debt negotiation and arbitration is one way that people use to solve their money problems. This isn't the right option for everyone but you will reduce or eliminate a lot of your debt and potentially find a solution that will be your light at the end of the tunnel.
When you start negotiation processes with creditors, they will offer you a settlement initially. Many people grab this first offer just because they want to get the whole thing over with, but if you have a professional negotiator or arbitrator in your corner, you'll end up with a better deal in the long run. If you are going to try and negotiate yourself, set your resolve and be patient. Remember that the purpose of all of these activities is to relieve your financial burden so you can move forward!
When to Retain Professional Debt Negotiation Services
Have you considered finding a professional debt negotiation service, but you don't know if you really need it? Here are some scenarios that indicate you may need professional help.
- Multiple Creditors – Do you have several creditors pressuring you because you can't make payments? If you can't keep up and you're buried under debt, calling a debt negotiation service may be a smart route to take.
- Gross Amounts of Debt – Negotiating a couple of credit cards or a small debt may be feasible for a regular person, but if you have large debts from medical expenses, high limit credit cards or business loans, you should consult a professional.
- Tax Complications – If your debt has any tax ramifications or is related to your taxes, go to a professional. The last thing you need is a problem with the federal or state government.
No matter what, if you feel overwhelmed with debt and creditors, there is nothing wrong with calling a professional and finding out if you can take advantage of their services.