 Debt negotiation is sometimes referred to as debt settlement. This is most often offered to people who can't handle a debt consolidation program. If you can't make the minimum payments of a debt consolidation repayment plan, or haven't made payments in the past 3 months, a debt negotiation program is the next step for solving debt and credit problems.
With debt negotiation you stop making payment to your creditors. The debt negotiation company will reach an agreement with your creditors for a lower payoff of around 50 – 60% of the total amount of debt. Once this has been arranged the company will make a one-time payment to the creditors and you will then be liable to repay the debt negotiation company. The disadvantage of debt negotiation is that it will adversely affect your credit score. |
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