What is Debt Settlement?
Debt settlement is a process through which your creditor agrees to accept less than the full amount owed, yet considers the balance as paid. A debt settlement process is an agreement to pay as much as possible of the debt during a limited period, and then have the remaining debt cancelled.
Debt settlement companies, sometimes known as Debt negotiators or arbitrators, can make the path to financial freedom. Debt negotiation and settlement is an assertive approach to debt relief. The advantage of which is that you will be paying a considerably lower amount and get away from being defaulter. If it seems unlikely that creditors would agree to a payment less than what they are owed, in reality it makes a lot of sense. Hence the process works out for everyone concerned: You pay less, and your creditors receive more than they would if you declare yourself bankrupt or skip.
Brief Explanation About Debt Settlement Or Debt Negotiation
- Settlement companies can often negotiate reductions of 30%-50% of the debt you owe. They then set up a repayment plan that typically takes between two and four Months.
- Settlement companies charge significant fees. Different settlement companies have different fee structures, but there are two basic approaches. In one model, the settlement company’s fee will be a percentage of your total debt. The fees in that model typically range from 5%-10%. Another option the settlement company may offer is to base their fee on the amount of debt reduction they can negotiate. Fees under this model can be as high as 20%. In addition, many settlement companies also charge a monthly fee that can range from about 15k-25k a month for the entire program. Either way, it is not uncommon for settlement fees to total thousands of Rupees.
- The settlement company will attempt to negotiate a settlement offer with your Banks or Financial Intuitions. This may take 5 Weeks or more, although the exact length of time will vary with circumstances. During this time, the balance on your debt can continue to grow if interest and various penalty fees continue to be charged by your Banks or Financial Intuitions. As a result, you may owe more than when you started and your credit may suffer because of your failure to make any payments on your debt.
- Debts paid off through settlement will generally show has Settled on your CIBIL Credit report. If you later apply for new loans or credit, when reviewing your CIBIL credit report the prospective lender(s) will see that a previous debt was paid by settlement, indicating that your repayment did not cover the total debt that you owed, but that your Bank accepted a lesser amount.
Debt Settlement Process With Millennium Credit Solutions:
- The CIBIL credit score is based on information contained in the credit report, with the highest consideration given to how you repay your debts. If you’re not repaying the creditor or have missed payments, it will show on your credit report and potntially lower your credit score significantly.
- Step 1: Request a Free Quote from Millennium Credit Solutions. Our Debt Management Specialist will conduct a one-on-one meeting with you. She/he will take details of your specific problem, which will be held in strictest confidence. She/he will also help you to collect the information and documentation we need in order to assist you.
- Step 2: After assessing your situation and circumstances, our Debt Management Specialist will arrive at a Debt Management Program (DMP) that is tailored to suit your needs. When you accept and enrol yourself with us, all necessary paperwork would be accomplished to kick start your DMP.
- Step 3: Millennium Credit Solutions Review Panel will review the inputs given by you, evaluating them and arriving at a viable solution. Our Debt Management Specialist will then talk (take? ) you through the steps you must take, your payment options, and how long it will take to be finally free of debt. On completion of this process, you will be given a comprehensive analysis of your financials, with details of all available options.
- Step 4: On your agreement to a specific course of action or plan, we will negotiate with and get acceptance letters from your creditors. Now, a Process Specialist from our team will be appointed as a single point of contact for you. She/he will assist until you clear all your debts that are registered with us, and get No Dues Certificates from your creditors. Until you are debt-free we will work with you, and even beyond since our service is designed to help you GET OUT AND STAY OUT OF DEBT!