An educated consumer in financial trouble might be one of a lender's worst nightmares, especially when it comes to dealing with collection agencies. With a little research and willingness, even the most cash-challenged debtor can find alternative ways to handle debt and avoid nasty consequences such as lawsuits and wage garnishments.
Credit Counseling
Credit counseling is one of the debt cures they don't want you to know about. It basically allows a representative of a firm to negotiate on behalf of a consumer and get lowered interest rates, waived late and over-the-limit fees, and make the payments to the creditor on behalf of the customer.
Debt Reduction Calculators
Debt reduction calculators (see Resources section) are a great way for consumers to save thousands of dollars and years of debt repayment. Using the program as a tool, the debtor can see how much money adding even $10 a month to a credit card payment could save them, which of course cuts the credit card company's profits.
Settlement Offers
Once an account goes to a collection agency, it often becomes much easier for a consumer to pay less of a debt than actually is owed. Bill collectors will usually take pennies on the dollar to earn something from the case, saving the debtor money, earning the collection agency profit and resulting in a loss to the original lender.
Hardship Programs
Another one of the debt cures they don't want you to know about is in-house hardship programs, which virtually every lender has for emergency situations. These can be accessed by simply calling the creditor, explaining the situation and asking to sign up for the hardship program to reduce interest rates, monthly payments and other fees.
Bankruptcy
Bankruptcy, especially Chapter 7 debt forgiveness, is the worst nightmare of every creditor. Consumers who cannot pay their bills anymore can have virtually every kind of consumer debt legally forgiven, and the creditor usually winds up with nothing.
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