Debt reduction settlement and the debt negotiation, one way or another is the same thing and used to achieve the same task, a debt reduction settlement for a debtor from his or her creditor, to pay a reduced amount than the actual amount taken. Where it is a very viable exercise for the debtor at certain stage of his debt, it is very much relaxing and either tempting for the creditor who is hopeless to get his amount back and have become so desperate to file a bankruptcy.
Averagely the whole process takes twenty months with an average advantage of debt reduction settlement in 40%-60% and as you are confronting your creditor with a counselor, you have to pay the party 10%-15% of the deal amount so, accumulating all the odds, you end up with a 40%-45% savings anyhow.
Here it is important to keep in mind that these types of negotiations do not involve debts which are secured or backed by some certain security, pledged property, vehicle or insurance policy and only involved credit card installments and the debts which do not acquire any security, thus unsecured and creditor does not have anything to claim in and sell to get back his or her dues or even the full payment.
One of the major reasons why it is feasible for unsecured debt and why creditors are accepting and availing this option for their debtors rather than filing a bankruptcy is the element of loss. The loss of the original amount, as there is no security involved and they can not possibly sell anything to get their actual or to get a partial payment amount, forces them to agree on this settlement. so whenever they find their debtor is not paying the amount of the installment they without doubt go for a personal note, run agents behind you to locate if there is any problem so that they successfully get things done in their favor.
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