What is Debt Negotiation? Debt negotiation is a method of settling your old bills and collections accounts without filing a bankruptcy or joining a debt management company. Many people are skeptical that you can negotiate collection accounts with creditors.
Many consumers are resigned to the fact that their debt situation is out of control and that there is no hope to get out from under it. Most assume that their only option is to talk to a lawyer about filing for bankruptcy protection. Many people are just plain scared of the bill collectors that continually hound them. Collection agencies want you to believe that you are facing an impending doom. This could range anywhere from seizure of property to garnishment.
The Truth About Debt Negotiation
What most consumers fail to realize is that for these actions to be enforceable, collection agencies must take you to court first. This fear will drive people to seek out the possibility of filing a bankruptcy. For many, the debt negotiation process could provide benefits (like improving credit without bankruptcy), but these benefits never get realized because the debt negotiation process is not understood, or believed to even be possible.
Court Is An Undesirable Option For Creditors
Creditors do not really want to take you to court. First, it is expensive; and then even if they win, it can be difficult for them to collect from you. If they were to garnish your wages, you could simply move jobs and they would have to start the process all over again. Going to court is not free; there are legal fees that have to be paid whether they win or not. They do not want to throw more good money after bad. Creditors want to settle for this reason.
Court Is Only An Option In Extreme Cases
A creditor can sue you but in most cases they would rather not. I would never tell you to not worry about it because the reality is that you can get sued, have your wages garnished, and have your property seized. For creditors to go to this extreme, however, you must owe them a lot of money.
