Consumer Rights Regarding Debt Collection – Understanding the Details of Debt Relief Options
You may be one amongst those who know the consumer rights regarding debt collection. The thing that you know are simple things which are always displayed on the forefront. These include the following:
- The amount of credit debt that you have must be at least $ 10,000 in order to get a debt relief.
- The overall debt must be consolidated in one single place.
However, there are several other things that fall under the consumer rights regarding debt collection and you need to understand the details of these debt relief options. There are several questions which need attentions. Let us look into all of then individually.
First: Why are creditors open to debt settlement deals?
Ans: It is because of the reason that the govt. policies ensure that the creditors are compensated for the loss that they bear when they agree for debt settlement deals. When the creditors agree for settlement deals, they lose some money. However, they enjoy tax breaks and stimulus cash from the govt. as a compensation for the loss that they bear. The creditors can use the stimulus cash to cover the costs that they have.
Second: Why is it advised to hire a professional debt settlement company?
Ans: This is because of the fact that a professional company has a complete knowledge of the banking system and knows how the system works. The company also knows the details of the govt. policies and therefore the professionals from the company can use these knowledge to get a good settlement deal for you so that you can get relief from your dues.
Third: What happens during the settlement procedure?
Ans: The professional negotiator from the company advises you to go delinquent. After you stop paying, the creditor waits for 12-16 weeks and then sells off the debt to a collection agency for 20-30 cents on the dollar. The negotiator then contacts the creditor and offers a better deal of 30-50 cents on the dollar. The creditor finds the deal to be a better one because it means 100% ROI for the collection agency and eliminates at least 50% of the debt that you have.
This is how a debt settlement program works and you can enjoy relief from your unsecured debts!