Causes Of Delays In Debt Negotiation

Sometimes no matter how good your debt negotiation agency is, delays can indefinitely push back the good news you’ve been hoping to hear. Companies involved in fraud will promise you results as soon as a couple of weeks but experienced and credible consolidators know that effective negotiations with creditors take a huge amount of time and use up a lot of resources.

To put your mind at ease, here’s a small list of things that can contribute to the length your application for a settlement or consolidation can take:

1) Current status of the economy. Reports from both credit counselors and creditors’ loss mitigation departments say that there is definitely a backlog due to the surge in number of people facing foreclosure. However, creditors becoming more open to helping people find repayment solutions gives consumers an added advantage and a lot of organizations are currently working on adding more staff.

2) Your credit score. The number of times you’ve missed a payment, the frequency of delays, and the amount of time it takes you to complete a payment can be a determining factor during the negotiation. Creditors want to know that you will hold up your end of the bargain if they revise your payment terms. Just as well, your creditors can use your credit score as a reference in deciding how much an interest rate to give you.

3) The status of your account before entering debt negotiation. Your application stands a better chance of getting a favorable result the further it is from the collections department of your creditor. Since it is no longer a requirement to miss a payment before being eligible for debt settlement, do not wait until your account has been transferred to your creditor’s loss mitigation department. Your debt reduction law center will still be able to help push your case along with loss mitigation but it can be infinitely difficult once it reaches collections where your only option is to pay up in full.

4) Previous negotiation records, if any. Banks and creditors normally only allow a consumer one attempt at securing a settlement of their debts. If you’ve previously hired a debt consolidation or settlement firm that has been found guilty of fraud, your appeal for new terms might be put on low priority or, worse, be ignored by your creditor. The best thing you can do to avoid being a victim of fraud and scam artists is to make sure that you leave the management of your debts with a reputable and experienced professional. Look up a local debt reduction law center and rest knowing that you stand a chance.

By: Mary Hall

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Mary Hall has made it her mission to make finance articles newbie-friendly. She is currently an associate writer for Emilio Francisco's debt reduction law center.