Debt negotiation is the act of negotiating with creditors for a lower total amount of debt owed. It is a bit different from bankruptcy as it requires a settlement of debt. Bankruptcy merely declares that you are in debt and cannot pay off your debts; debt negotiation requires a negotiation for a lower total payment. Debts are often unsecured debts like credit cards. Negotiating for debt elimination is based on the debtor’s ability to pay. The ultimate goal of debt negotiation is to eliminate interest and principal on debts. Debt settlement firms often will negotiate on your behalf to reduce the total principal balance, but most importantly at a reduced rate. In debt negotiation, debt settlement companies are sometimes included as third party negotiators that the original creditor uses. Sometimes, debt negotiation is part of a full blown bankruptcy procedure where the original creditor is requested to accept a lesser amount than the entire balance owed.

Creditors are not as willing to settle due to the fact that bankruptcy stays on their records for ten years. A debtor seeking debt relief option may wish to consider a debt negotiation. In this process, they will hire a negotiator to work out a settlement. Settlements usually come in at about fifty to seventy percent of the original amount owed. If you are thinking about debt negotiation, be sure to research the various companies that are available and find the one that suits you and your financial situation best. You will want to do some research online to learn more about this process. The Internet has made debt negotiation much easier and accessible. A simple Google search can give you all the information you need to get started. It is not as hard of a process as people believe.

Choosing Debt Negotiation Services 

When choosing a debt settlement company, you should make sure you choose one that is reputable. There are many different debt consolidation firms and negotiation firms. Some debt collectors have been known to take advantage of consumers. A professional debt negotiation firm will work with creditors in a friendly manner. They will try to get interest rates lowered and reduce the amount of money the consumer is required to pay each month. Creditors generally prefer to negotiate rather than go through a lengthy court battle. They also prefer to settle rather than go to trial and spend more money. A debt negotiation program can save them money, which they would spend on paying lawyers or going to trial. When dealing with creditors on your own, it is important to remember that you are only offering to negotiate on your own behalf. You should not make your creditors believe you are negotiating with them on their behalf when you are actually looking to eliminate sixty to ninety percent of the amount owed.