There is an old saying we have all heard before. It goes something like this, “If it sounds to good to be true, it probably is.” The same could be said about the debt reduction/debt settlement industry. It does sound too good to be true, however in reality, a debt reduction company can in fact negotiate and settle your debt for a fraction of what you owe.
Here we will explain how a debt settlement program works. Although not simple, it is all done through negotiation. The settlement process of course depends on a number of factors which includes the role of both the borrower and the lender. The lender of course just wants to know when they are going to get their money back. The consumer on the other hand, wants to know if the amount they owe can be negotiated down to a working figure that they can put together to pay off the debt. The details then come down to a manageable monthly payment plan. Therefore we begin to show you how a debt settlement program works.
Hypothetically, let’s say you owe all of your creditors a total of $30,000 in unsecured debt, and your lenders require you to pay a minimum monthly payment of 3% each month. In this example you would be paying approximately $900/month (3% of $30,000), with which very little of that money is going towards paying off the principal of what you owe.
Now let’s look at Nationwide Debt Reduction’s debt relief plan. Let’s say our negotiators can get your creditors to accept 40% of what you currently owe, or $12,000 in this example. However, you are struggling to pay that $900/month and really can only afford $500/month. All you need to do is divide this $500/month by $12,000 to see that you could be debt free in 24 months or two years. And, my friends, that is exactly what debt reduction companies do. The key here is can they really negotiate your debt down to $12,000. The answer depends on which company you elect to do business with. Some can, others can only get 50%, still others 60%.
Naturally, the levels to which the terms and conditions are accepted through negotiation depend on several variables, however for the most part; it takes a strong company, having superior relationships with the creditors already, to make it all work.
Finally, one has to remember that credit card companies rarely ever lose money. They already earn 2.5% -3% from the retailer when you made the initial purchases. The retailer passes this cost over to the consumer with slightly higher prices. On the back end, they charge you interest, fees, late charges, over the limit fees, any fees they can get away with. In fact, most statistics show that if you have had a credit card for over 3 years, you have probably paid them back for everything you have purchased! However, keep in mind that the creditor would rather get back a negotiated discount of money, than no money at all.
To learn more about how a Christian debt management can help you, please call our toll free number at 1-800-890-6658. Professional debt advisors are available to talk to and explain this in more detail.