|
Debt negotiation, commonly referred to as debt settlement or debt elimination, is considered a specialty service mostly offered to people who "fall out" of a debt consolidation program, can't make the minimum payment of a debt consolidation program, or have large outstanding debts on which they haven't paid in the past 3 months. The main benefit of a debt negotiation service is that clients usually only pay around 50% of the amount they owe to their creditors.
Once you sign up for a debt negotiation program you stop making payments to your creditors (if you were making payments). No payments are made to your creditors during your participation in the program. The debt negotiation company then either takes monthly payments from you, which it stores up in a holding account, or it has you store up the money in your own account. During this process of accumulation, the debt negotiation company is handling your creditor calls and negotiating with your creditors for a lower payoff amount.
|
