Debt Mediation
Debt mediation involves negotiating with a creditor or creditors to pay off a percentage of your total debts at an agreed upon settlement amount. Often, people choose to utilize the services of a debt mediation company rather than attempting to do it on their own. Debt mediation companies use various negotiation strategies to help settle your debts and can eliminate between 40-60% of your original balances.
If a consumer files for bankruptcy, it is very likely that the creditor will receive nothing of the balance that is owed to them. Therefore, a creditor is better off negotiating with a debt mediation company. Most debt mediation companies work with customers that have legitimate financial problems and honestly need assistance.
The debt mediation process usually takes between 12 to 36 months, so consumers can wait for creditors makes the sensible decision to agree and negotiate. Besides the obvious benefit of debt mediation, another benefit is the help with creditor harassment. Debt mediation companies normally contact all your creditors and inform them that you are working with a debt mediation company and that you are now being represented. This is very important in that it helps minimize or eliminate creditor calls. The standard practice is to direct all communication to the debt mediation company that you are working with. However, it is important to remain cognizant of the fact that original creditors can still contact you legally, but most will comply with such requests.
The most important part of debt mediation is to complete the mediation process with your creditors and or collection agencies. In order to do this, it is necessary for a debt mediation company to have you sign a contract and a document that legally authorizes them to negotiate with your creditors on your behalf; this is known as a “Limited Power of Attorney.” During the mediation process, you will make a monthly deposit into a trust account that will eventually be used for your debt repayment. As funds begin to accumulate in the account, the debt mediation company will start to negotiate with your creditors. Once a debt mediation offer has been agreed upon, you will need to send that amount, directly from your account, to the creditor. Once the payment has been made, that debt is considered settled in full. You will no longer owe anything on that debt and the account will be closed.
 The National Debt Relief Group can help you find the right solution with a free consultation. You can fill out our Short Application and one of our debt specialists will contact you within minutes, or you can call now – (888) 703-4948.
Debt Mediation
|
|
Debts We Can Settle
Unsecured debts:
- Credit cards
- Unsecured loans, personal loans, or lines of credit
- Medical bills
- Collections or repossessions
- Business debts
Debts We Can't Settle
Secured debts:
- Lawsuits
- IRS debt or back taxes
- Utility bills
- Auto loans, government loans, or student loans
- Mortgages or home loans
- Other secured debts
Your Debt Relief Alternatives
If you are considering a type of debt relief program, know that there are alternatives to debt settlement. National Relief also offers debt management, which may work better for some consumers.
Your Consumer Rights
All consumers should be aware that they have specific rights under The Fair Debt Collection Practices Act. Debt collectors must follow the rules. Violations of this act by collectors can result in the consumer receiving damage awards.
|