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In an age of perpetual borrowing and increasing over-consumption, many people have found it impossible to deal with their constantly increasing debts. One of the best ways to save money on interest rates and late payment fees, lowering your monthly bills, is successful debt negotiation.

Debt negotiation as an alternative to bankruptcy

Debt negotiation, which is also known as debt settlement or credit counseling, has been developed as an alternative to filing a bankruptcy, which can have a long-lasting negative effect on your credit record. Persons who opt for bankruptcy say farewell to good credit as it shows on their credit reports for up to 10 years. Even afterwards, creditors may have access to this information and refuse to grant credit. On the other hand, with the help of an experienced credit advisor, you can successfully overcome your temporary financial difficulties.

Debt negotiation is not DIY

You should not represent yourself in court unless you are an experienced lawyer. By the same token, it is not recommended to enter in direct negotiations with your creditors unless you have the necessary preparation and expertise. Hiring a professional to represent you in the process of negotiations with creditors has several advantages. The most important of them is that your representative may reach a solid and reasonable settlement with the creditors, and all you will have to do is follow your prescribed repayment plan. The professional will know how to work his way at all stages of the process and can give you advice on what to expect and what the next moves are. Eventually, you will have a workable solution in your hands.

Debt negotiation does not wipe out debt

Bear in mind that even if you start a process of debt negotiation, you do not automatically become debt free. Rather, it means that you have acknowledged the seriousness of your situation and have sought some professional help. So, do not be fooled by debt settlement ads promising to wipe out all of your debts in the nick of time. Remember that bankruptcy is the only way to erase your debt, but its mark will remain on your credit report as if forever. Debt negotiation is a process whereby each of the concerned parties has representation, and the final decision on the matter is provided by a neutral entity. Under some circumstances, your representative and the spokesperson of the creditor may enter direct negotiations and reach a settlement.

Debt negotiations can be stressful

Although individuals typically opt for debt negotiation, it can also be ordered by a bankruptcy court. In this line of thought, debt negotiations can be really stressful at times, but the outcome will most probably be in your favor. Make sure that you understand all conditions and consequences of a deal before you accept it. Finally, it is important to realize that debt negotiation will just help you pay debts less painfully. If you have high expectations about it, chances are that you will end up disappointed.