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Should You Negotiate With Your Creditors On Your Own?

Jan 26, 2008
Are you one of the many people who are up to their eyeballs in credit card debt? In today's economy, many of us have tens of thousands of dollars in credit card debt making it difficult to pay the monthly minimum payments. Even more so now that the credit card companies have inflated the minimum payment amount required each month, as a result, many households have gotten behind in paying their credit cards.

Often, people find themselves exploring ways to reduce debt. As a result, they contact their creditors in an effort to bargain with them. If you're taking debt consolidation into consideration, you may be tempted to try and tackle this job by yourself.

By chance, you may have seen or heard of companies who'll arrange with your creditors, on your behalf, reduced payments and a lower interest rate. You can hardly avoid the advertisements on television about consumer credit organizations, debt counseling companies and credit management consultants. The issue is, are these credit counseling companies for real?

Some companies claim to help make deals with creditors, they may be dishonest and try to scam you, but in reality, several companies do exist that can really help to get your financial situation back on track. Many credit card companies will strike agreements with such organizations to waive late fees and charges for being over the limit on the credit card. Your interest rate can be lowered from over 20% to a more reasonable rate of 8% or 10%.

Why would a credit card company may be willing to enter into such an agreement with a debt consolidation company? Because, they want to be sure they continue receiving payments towards your debt. They are well aware that when people get behind in making their monthly payments, they risk defaulting on the debt. In addition, the further behind you become on your payments, the more likely you are to file for bankruptcy.

Credit card companies know they'll receive little or no money from a bankruptcy settlement. By working with a debt consolidation company, many people discover they're able to regain control over their finances and credit card companies can collect most of the money due them.

Trying to call the credit card companies on your own does not typically give you the leverage you need to make the best agreement possible. Carefully look for a debt consolidation organization that is reputable. Find a company that feels right for you and work together to secure manageable payments and create a plan to get out from under the sea of debt. There is a choice when debt starts pulling you under. There is no need to go it alone.
About the Author
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