There are a myriad of reasons that so many many good people across the United States currently find themselves with debt that they can no longer manage. A great many of them have now bought professional help in the form of a debt settlement agency to help them get a handle on their finances.
The economic recession that we are just now beginning to emerge from is by most accounts believed to be the worst recession we have seen since the Great Depression. It is in fact a worldwide recession that has devastated the economies of some nations.
Unemployment in the United States has topped 10% nationwide and when people do not work they do not get paid. Because of this a great many people can no longer afford to pay their bills. Many of us have been living from paycheck to paycheck for a good many years now and do not have savings to see us through these difficult times.
With that said there is definitely help available for those who seek it. Finding a reputable debt settlement agency is an excellent start on the road to becoming debt free. By working with a professional organization in good faith many people have become free of debt much faster than they would have been otherwise.
The way debt settlement works is that creditors that are owed money come to an agreement by way of negotiation with debtors. The vast majority of time it is done through a professional debt negotiator, also known as a debt arbitrator, that works with the creditor to reach an acceptable amount to settle the debt for.
Let's take a look at a hypothetical example; Sam owes his credit card company $ 25,000 but can no longer afford to even make the minimum payments. He hires a debt settlement agency that negotiates on his behalf a settlement total of $ 12,000. The remaining $ 13,000 is then forgiven by the creditor and written off.
You may be asking yourself why a creditor would agree to do this. Well the simple reason is that getting something is better than getting nothing. In a great many cases debt settlement is the final stop before someone files for bankruptcy. The creditors realize that getting a percentage of what is owed to them is far more agreeable to losing the entire amount that is owed to them.
Before agreeing to work with any particular debt negotiation company it is absolutely imperative that you do your homework to make sure it is in fact a reputable company. You can begin by inquiring with the Better Business Bureau and the Attorney General's office of your home state and the state that the debt settlement agency is headquartered in.
Negotiating debt whether it be for credit cards, medical bills or personal loans is a very serious matter that should not be entered into lightly. Go online, go to the library, consult with experts in your area, do whatever it takes to educate yourself on how the process works so that you fully understand what the process entails and if it is in fact the right decision for you.