If your life has become a living hell because of debt and the call made by collection agency then it is about time you opted for a debt settlement program.
A debt settlement program mainly involves negotiation between the debtor and the creditor in order to get a reduction in the total amount of loan as he / she is unable to pay back the loaned amount.
It also goes by the name debt negotiation or debt arbitration.
The concept of settlement is not a recent one but has been present for decades.
However with the recent slowdown in the economy it has gained popularity.
It is mainly due to the fact that the changes in the bankruptcy laws have made it difficult for a person to qualify for full bankruptcy.
A debtor having unsecured debt in the range of ten thousand dollars and above can apply for settlement.
How does Debt negotiation work? When a person opts for debt negotiation he has to inform the credit card company of his financial difficulties and convince them to accept him for a debt settlement program.
The debtor can also the ask the creditors for the collection calls to stop.
Now the debtor has to open an account in which he has to save up a certain amount of money for certain period of time.
When he has the required amount of money in his bank account he can then proceed with the debt settlement negotiation.
The debtor can use this significant amount of saving in order to get a reduction in the total outstanding balance.
Many debtors have been able to negotiate up to 60 % of the total outstanding amount.
The remaining 40 % can be paid off in installments.