In debt settlement, consumers have the natural advantage. Why? Because collectors are relentless in chasing after what you possess. That is the money owed to them. And, when they have to compete with other creditors for the money, it can dramatically reduce the amount they're prepared to accept.
The difference of hiring a debt settlement company to assist you in resolving the delinquent accounts or going at it alone is the confidence factor and thousands of dollars in up-front fees. Collection agencies are known to be relentless, persistent, demanding and sometimes outright abusive. Collection attorneys and their assistants are no different, in fact a phone call from them can insinuate a lawsuit proceeding. The process becomes extremely intimidating and unnerving.
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If consumers invest time to understanding the collections process and their rights, their confidence in representing their case to collectors will become less frustrating. The debt collection business works almost as an automated process. They purchase or are contracted to collect the debt for the original creditor for pennies on the dollar. The added penalty, collection, and interest fee are bogus. So accepting a reduced amount is clearly in their best interest as an alternative to pursuing the debt indefinitely. Debts that are not collected in a reasonable time are repackaged and sold to another collector for a lesser amount.
When dealing with collectors, consumers have to anticipate the attitudes they are to encounter. And, you should always expect collection attorneys to be more difficult in negotiations. Attorneys prefer to negotiate with other attorneys and are often rude or dismissive to debt settlement agents. However, they are more willing to work out a settlement with the debtor than debt settlement companies.
All together, by understanding the laws that govern the collections process, the collector's aggressive tactics are less effective. Since the consumer or debt settlement company has authority over the settlement funds, they have a natural advantage over the collector seeking those funds.
I always recommend going at it alone before hiring help. However, before doing so, you must understand your rights and how the process works. You cannot negotiate from a clueless perspective. That would be foolish because debts that are unpaid have legal consequences. If a lawsuit is proceeding against you, you must seek the advice of a qualified attorney.
If you are considering enrolling into a debt settlement program, then do so by fully understanding the pros and cons. The best thing about debt settlement programs is that they can take the worry off of you and provide support during the process. However, you must seek representation from a TASC or USOBA certified member firm. These services come at a hefty price in the form of up-front fees. To collectors, debt settlement companies can be seen as another competitor in contention for the debtor's limited funds.
The mistake made today by most consumers is that they enroll into a debt settlement program and then drop the program in an effort to do it themselves. It's also fair to say that because the program is projected to conclude in up to 36 months; financial circumstances may change and force the program to end. Today's uncertain economy makes that more of a possibility.
The best advice is to get educated in understanding the process and make your decision based on your circumstances. The process of debt settlement is not much different whether going at it alone or hiring help.
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