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What is Debt Negotiation?

According to the United States Census Bureau, 69 percent of Americans are in debt by an average of $70,000.

The same report indicated that consumers with the greatest amount of growing debt were those in the age group of 35 to 45, with roughly $108,000 in debt. Those aged 45 to 55 were carrying $86,500 in debt and people aged 55 to 64 were saddled with $70,000 in debt.

So how do people get so far in debt in the first place?

All it takes is one job loss, one health crisis or one unexpected expense for the average American to become financially stressed. Once a person's credit is over-extended, it creates a vicious cycle of paying only the minimum balance and accruing penalties and fees until the original amount owed has tripled or worse.

If you are among the 69 percent of Americans who are carrying around more debt than you can reasonably pay off, then it's time to explore options for reducing the financial burden.

There are a plethora of companies which offer debt negotiation services. However, not all debt negotiators are created equal.

The concept behind debt negotiation is to convince creditors to reduce the total amount of money owed in lieu of a set fee. The set fee usually is required to be paid up front.

Sounds like a great idea, doesn't it?

There's only one problem - most for-profit debt negotiation companies are nothing more than crooks. They require hefty, upfront fees for their services, and then not only fail to contact your creditors on your behalf, but also will not put any of the money you gave them toward your owed debt.

So how do you know if you're about to be taken by a company that has no real intention of helping you reduce your debt?

The Federal Trade Commission offers the following warning signs for identifying fraudulent debt negotiators:

  • They will promise they can reduce your debt to the point that you're paying pennies on the dollar for what you actually owe
  • They will promise that some of your debt will be eliminated entirely
  • They lie and tell clients that unsecured creditors do not sue debtors for non-payment
  • They claim they can remove negative information from your credit report

Debt negotiators are not lying when they say they can negotiate with creditors on your behalf. However, what many fail to disclose to clients is that creditors are under no obligation to agree to a debt negotiation.

Debt negotiation can be a very effective tool for consumers looking to get out of an overwhelming debt situation. Finding a quality debt relief service is an important first step in the process.

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Debt Relief Company FAQ

Debt relief is a process that helps people get out from under their ever-mounting financial obligations. This can be accomplished through Debt Negotiation, Debt Settlement, Debt Consolidation or Repayment Plans, among other strategies.
You'll need to have a certain amount of debt to be eligible for debt relief, which varies according to which relief service you choose. Some require a minimum unsecured debt of $7500, while others specify that you need to owe at least $10,000. Also, some debt relief providers aren't licensed in all 50 states - so you may be eligible for debt relief but the service you're considering isn't available in your state.
Believe it or not, many debt relief services are free! Most providers give you a no-cost consultation, analyzing your financial situation and making recommendations tailored to your needs. But, there are some fee-based services, especially if you want someone to negotiate with creditors on your behalf.
Many of the strategies used by debt relief providers can be done on your own, yes. But, in the amount of time it would take you to get up to speed and learn what those strategies are, you could be paying hundreds (or thousands!) of dollars in interest. It's almost always a smarter financial move to have the experts do the work for you.
The first step is usually the complimentary consultation, where a representative will go over your debt situation and find out your goals, needs and timeframe. From there, it will depend on which approach you decide to take - but, for the most part, the debt relief service will be in charge of contacting your creditors and working out the details for reducing what you owe.
No two consumers are alike - and debt relief strategies vary as well. Some services offer relief through a personal loan, allowing you to pay off high-interest debt with a lower-interest arrangement, so naturally your situation will change as soon as your loan is funded and used to reduce your monthly payments. On the other hand, if your service is negotiating with your creditors to reduce or eliminate what you owe, that can take several weeks to months.
Most of the time, there isn't. A few debt relief services offer a 100% customer satisfaction guarantee, allowing you to cancel your plan without fees or penalties. Read the fine print of any contract before you sign up, so you'll know exactly what's promised - and what isn't.
Debt relief may sound too good to be true, but it's a legal, well-known method for reducing the debt burden faced by many consumers. Although some fly-by-night services pop up from time to time, most companies offering debt relief have been in business for a decade or longer. You can always check for a company's listing with the Better Business Bureau for further confirmation that it's a trustworthy option for debt relief.

Compare Debt Relief Companies

Select any 2 Debt Relief Companies to compare them head to head

debt-relief-programs
  • National Debt Relief
  • Credit.org
  • Curadebt
  • Upstart
  • SoFi
  • LendingTree
  • LendingClub
  • CareOne Debt Relief Services
  • American Debt Enders
  • Accredited Debt Relief
  • OneMain Financial
  • Savvy Money
  • Debt Consolidation Care
  • Fast Track Debt Relief
National Debt Relief vs Credit.org National Debt Relief vs Curadebt National Debt Relief vs Upstart National Debt Relief vs SoFi National Debt Relief vs LendingTree National Debt Relief vs LendingClub National Debt Relief vs CareOne Debt Relief Services National Debt Relief vs American Debt Enders National Debt Relief vs Accredited Debt Relief National Debt Relief vs OneMain Financial National Debt Relief vs Savvy Money National Debt Relief vs Debt Consolidation Care National Debt Relief vs Fast Track Debt Relief Credit.org vs Curadebt Credit.org vs Upstart Credit.org vs SoFi Credit.org vs LendingTree Credit.org vs LendingClub Credit.org vs CareOne Debt Relief Services Credit.org vs American Debt Enders Credit.org vs Accredited Debt Relief Credit.org vs OneMain Financial Credit.org vs Savvy Money Credit.org vs Debt Consolidation Care Credit.org vs Fast Track Debt Relief Curadebt vs Upstart Curadebt vs SoFi Curadebt vs LendingTree Curadebt vs LendingClub Curadebt vs CareOne Debt Relief Services Curadebt vs American Debt Enders Curadebt vs Accredited Debt Relief Curadebt vs OneMain Financial Curadebt vs Savvy Money Curadebt vs Debt Consolidation Care Curadebt vs Fast Track Debt Relief Upstart vs SoFi Upstart vs LendingTree Upstart vs LendingClub Upstart vs CareOne Debt Relief Services Upstart vs American Debt Enders Upstart vs Accredited Debt Relief Upstart vs OneMain Financial Upstart vs Savvy Money Upstart vs Debt Consolidation Care Upstart vs Fast Track Debt Relief SoFi vs LendingTree SoFi vs LendingClub SoFi vs CareOne Debt Relief Services SoFi vs American Debt Enders SoFi vs Accredited Debt Relief SoFi vs OneMain Financial SoFi vs Savvy Money SoFi vs Debt Consolidation Care SoFi vs Fast Track Debt Relief LendingTree vs LendingClub LendingTree vs CareOne Debt Relief Services LendingTree vs American Debt Enders LendingTree vs Accredited Debt Relief LendingTree vs OneMain Financial LendingTree vs Savvy Money LendingTree vs Debt Consolidation Care LendingTree vs Fast Track Debt Relief LendingClub vs CareOne Debt Relief Services LendingClub vs American Debt Enders LendingClub vs Accredited Debt Relief LendingClub vs OneMain Financial LendingClub vs Savvy Money LendingClub vs Debt Consolidation Care LendingClub vs Fast Track Debt Relief CareOne Debt Relief Services vs American Debt Enders CareOne Debt Relief Services vs Accredited Debt Relief CareOne Debt Relief Services vs OneMain Financial CareOne Debt Relief Services vs Savvy Money CareOne Debt Relief Services vs Debt Consolidation Care CareOne Debt Relief Services vs Fast Track Debt Relief American Debt Enders vs Accredited Debt Relief American Debt Enders vs OneMain Financial American Debt Enders vs Savvy Money American Debt Enders vs Debt Consolidation Care American Debt Enders vs Fast Track Debt Relief Accredited Debt Relief vs OneMain Financial Accredited Debt Relief vs Savvy Money Accredited Debt Relief vs Debt Consolidation Care Accredited Debt Relief vs Fast Track Debt Relief OneMain Financial vs Savvy Money OneMain Financial vs Debt Consolidation Care OneMain Financial vs Fast Track Debt Relief Savvy Money vs Debt Consolidation Care Savvy Money vs Fast Track Debt Relief Debt Consolidation Care vs Fast Track Debt Relief
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