What Is Debt Negotiation?
If you’ve found yourself struggling with mounting piles of debt or feeling unable to pay your bills on time while dealing with a stack of maxed out credit cards and overwhelming arrears, you may have come across the term “debt negotiation”.
In the right circumstances, debt negotiation can be an effective tool for helping people resolve all or some of their debt and remain in positive financial health. So, what is debt negotiation, and how can it help those struggling to keep up with their debts? Let’s take a look.
What is debt negotiation?
Debt negotiation is a process between a borrower and a creditor to reach an agreed settlement on an outstanding debt. In essence, it means that the creditor has agreed to accept less than the full amount owing on the debt to finalise it.
Once an agreed settlement has been reached, the creditor can no longer pursue the borrower for the money. This strategy is often used by people who cannot repay their debts to avoid bankruptcy and the significant financial consequences that come with it.
How does debt negotiation work?
Debt negotiation only becomes a viable option when a borrower has several late or missed payments — a creditor won’t accept less than the full amount owed on a debt if they have reason to believe that the full amount can be repaid.
The process starts with the borrower — or a debt negotiation company acting for the borrower — proposing a strategy for dealing with the debt to the creditor. The creditor will then choose to accept, reject or make compromises to the proposal. The process can be lengthy, as both sides need to work to come to an agreed-upon solution.
When to choose debt negotiation
Debt negotiation may be a viable option if:
You’re having trouble meeting monthly repayments
You’re experiencing significant financial hardship
You want to avoid bankruptcy
Successful debt negotiation ultimately relies on the creditor’s discretion — positive results aren’t guaranteed. It should also be undertaken with sensible financial management strategies or with the help of financial counselling.
Benefits of debt negotiation
Debt negotiation has several benefits for borrowers, including:
Averting bankruptcy
Helping you stay on top of credit card and loan repayments
Reducing financial stress by providing a reprieve from overwhelming debts
And, it’s not only borrowers who can benefit from negotiating debt settlements. Debt negotiation allows creditors to settle debts that otherwise may not have been repaid, allowing them to recoup at least a portion of the borrowed amount.
How can Real Credit Repairers help?
Negotiating with creditors can prove daunting for those not experienced in the field. A professional credit repair company, such as Real Credit Repairers, can ease the stress and burden of debt negotiation and, in doing so, help improve your credit rating.
Our financial experts have years of experience in dealing with a wide range of creditors — even the difficult ones — and can work on your behalf to negotiate your debt totals. If successful, you not only clear your debts faster, but you may also improve your credit score.
Get in touch with our expert team today
Are you looking for expert help with debt negotiation? At Real Credit Repairers, we’re here to help. As your trusted credit repair experts, we’ll provide you with a free credit repair report and walk you through it to explore ways to improve your credit rating in as little time as possible.
The best part? You only pay for our success — if we can’t help you, you won’t be charged a thing. Ready to get started? Get in touch with our expert team today!
