Essentially, A Debt Settlement Company negotiates on the borrowers’ behalf with creditors to reduce the overall debts in exchange for an agreement upon regular payments to be made. Generally, credit card debts and medical bills can be handled. For the debtor, this makes obvious sense – they avoid the stigma and intrusive court-mandated controls of bankruptcy while still lowering, sometimes by more than 65%, their debt balances. Whereas, for the creditor, they regain trust that the borrower intends to pay back what he can of the loans and not file bankruptcy (in which case, the creditor risks losing all monies owed). Usually a consumer needs some money saved over a pre-determined period of time. Once enough funds are built up the negotiation process can begin with each creditor individually. Accounts can be held by credit card companies or may be sold to collections agency for average of $0.15 on the dollar. In which case debt can still be negotiated. The debt settlement company negotiates with the credit card companies for 35% - 65% of the existing balances. The debt settlement companies typically have built up a relationship during their normal business practices with the credit card companies and can come to a settlement agreement quickly. With the current economic crisis more and more credit card companies may be willing to settle existing credit card debts rather add to their already large written off bad debt.

The creditor’s primary incentive is to recover funds that would otherwise be lost if the debtor filed for bankruptcy. The other key incentive is that the creditor can often recover more funds than through other collection methods. Collection agencies and collection attorneys charge commissions as high as 40% on recovered funds. Bad debt purchasers buy portfolios of delinquent debts from creditors who give up on internal collection efforts and these bad debt purchasers pay between 1 and 12 cents on the dollar, depending on the age of the debt, with the oldest debts the cheapest. Collection calls and lawsuits often push debtors into bankruptcy, in which case the creditor often recovers no funds. That's why we tell our clients who have large credit card or medical debt to call us. We work with honest are proven Debt Settlement Companies that have a proven track record in reducing debtors payments by 50%, 60% and 70%. Please call us for a free consultation or email Jason@trafficticketteam.com.

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