Some information about debt negotiation companies
Debt negotiation companies work with creditors to create affordable repayment plans for people who are overwhelmed by their financial obligations. The companies are strictly regulated by the Federal Trade Commission and can only get paid when they get results for their customers. Florida residents who are seeking debt relief may benefit from knowing important facts about these matters.
Using these companies, an individual may be able to get out of debt within two to four years. Excluding fees, the total amount of debt may be reduced by half. Debt negotiation does not take as long as credit counseling, is less expensive and also requires a smaller minimum payment.
While debt negotiations has many advantages, there are some drawbacks people should consider. Any payments that are missed during the negotiation process will accrue interest and fees and will negatively affect credit scores.
Individuals considering debt negotiation should also understand the importance of the FTC rules for the industry. According to the 2010 rules, debt negotiators can no longer charge upfront fees in exchange for their services. In order for individuals to be obligated to make a payment, the debt relief company is required to reduce, settle or negotiate the terms of debt. When searching for a reliable debt negotiation company, individuals can verify whether the company is registered with the American Fair Credit Council. The AFCC holds its members to certain standards, including the requirement that the company cannot charge upfront fees.
Individuals can address their debt in a variety of ways. Another alternative could be filing for Chapter 13 bankruptcy. This involves repaying debt pursuant to a court-approved plan, and an lawyer can provide more information on this method of relief.