Frequently, consumers settle their debts online, with the assistance of a lawyer, or by using settlement companies that deduct their fees or a monthly fee from their bank accounts, reducing the incentive to negotiate with creditors.
In essence, the debt settlement company negotiates with creditors on behalf of the consumer to reduce the total amount owed in exchange for an agreement to make regular payments. It is only possible to manage unsecured debts, such as past-due credit card balances or medical bills, but not student loans, auto loans, or mortgages.
For you, this makes perfect sense: they avoid the stigma and bankruptcy while reducing their balances by sometimes more than 50 percent. In contrast, creditors regain confidence that the consumer/borrower intends to repay what he can and will not file for bankruptcy.
Insolvency is the legal declaration of an individual or organization's inability to pay its debts. Frequently, creditors file a bankruptcy petition against borrowers/consumers (involuntary bankruptcy) in an effort to collect a portion of what they are owed or to undergo reorganization. In many instances, the filing of bankruptcy is initiated by the insolvent individual or entity.
Although there are few creditors who wish to force debtors into bankruptcy - and the strength of government protection against all debts - there are few creditors who wish to do so. Sometimes, the specific liability of the debtors themselves impacts the success of negotiations.
Recent legislation has granted student loans, even those not subsidized by the federal government, the ability to garnish bank accounts without the possibility of bankruptcy protection. Additionally, some individual creditors, such as Discover Card, tend to exhibit aggressive resistance to negotiations.
" - https://www.affordablecebu.com/
