Debt settlement is a practice that allows people who are in debt to pay off their debts at reduced amount. However, not everyone is qualified for this practice. Why is this so? Below are some scenarios where debt settlement plans are not accepted by the creditors:
•If the debtors have dragged their repayment for more than 6 months, it is quite for sure that the creditors won't agree to accept the settlement proposal.
•For people who are not really suffering from financial hardship, they are totally not allowed to settle their debts. It is unfair for them to take advantage to reduce their debt amount through this method. Bear in mind that settlement plan is not meant for providing discount for people. It is a solution which is used to assist people in debt to reduce their financial burden.
•Many creditors are unwilling to deal with debt management companies who act on behalf of their clients. If you intend to overcome your problem, you are advised to negotiate it with your creditors on your own.
•Negotiating for a higher debt reduction which is up to 60% is quite challenging as most of the creditors do not allow the settlement amount to be reduced so much.
•For people who have too little cash on hand, it is quite definite that debt settlement is impossible. Your negotiation power is very weak if you don't have sufficient fund. Furthermore, how can you pay off the debt amount once your proposal is accepted by your creditors?
To sum up, never take settlement plan for granted. You will never be successful.
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