People are wondering what to do and how to keep their heads above water since the down turn in our economy. It does not help that they are inundated with advertisements promising to get their credit card debts wiped out, can stop harassing phone calls with a repayment program, or that bankruptcy is the answer. They often do not know which way to turn or who to turn to. Debt negotiation programs are becoming increasingly popular to help them with their unsecured debt.
To qualify for debt reduction, companies usually want you to have $10,000.00 of unsecured, qualifying debt. They cannot lower taxes, either IRS or state, student loans, alimony or law suits, even though they are unsecured. And, of course, they cannot lower your home mortgage or equity, vehicles loan, or other secured debt. So, add up the total amount of all types of credit cards, past due utility bills, vehicle repossession bills, medical bills, and unsecured personal loans, and if they are $10,000.00 or more, you just need to check for a reputable one that will work for you.
A good company will give you a free consultation, for which you will want to be prepared. Check the company out before you go, both with the BBB and Chamber of Commerce as well as online. You should have you complete list of creditors and what you owe each, but also what your total income is and why you got so far behind. At the meeting, they give you their recommendation, including a repayment plan for the reduced amount and a time limit as to how long it will take for you to achieve your goal.
If your debt is under $10,000.00, you should talk to a debt management company. You need to be real careful with this one as some (under the guise of consumer credit counselors) have been late making the payments on your behalf, or drug it out, when you would have been better off filing bankruptcy. The late payments showed up on credit reports long after their credit scores should have theoretically been improving.
The most important thing to remember is to keep your head and do not jump into more trouble than you have now. They can get a qualifying debt reduction of 40% to 70% depending on your circumstances and the creditor.