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Debt Settlement Negotiation: Should I Hire a Firm or Negotiate Directly?

By DebtSettlements.com Staff

Debt settlement negotiation is something that many people turn to a debt settlement firm to handle. Some consumers mistakenly think that only professional debt settlement firms are qualified to do this. The truth is that anyone is capable of negotiating a settlement. Consumers may negotiate debt settlements directly with their creditors. Both options, direct negotiation and working with a firm, have strong pros and cons, and the choice that is best for you will depend largely on your personality.

Benefits of Direct Negotiation

Direct debt settlement negotiation costs nothing. This is the primary benefit. Hiring a firm can be costly, sometimes very much so. When you are already facing financial problems, the idea of hiring someone to help you with mounting debt may seem counter productive.

Another benefit of direct negotiation is the fact that you will know exactly what is going on. When you turn that process over to a third party, you lose some control over the situation. If negotiations are going poorly, you may be unaware, depending on the transparency of the debt settlement company.

Cons of Direct Negotiation

Creditors are not going to roll over and offer a debt settlement without a fight. If you are serious about debt settlement negotiation, it will take a significant amount of work. The creditors may make it sound impossible. You have to be persuasive and tenacious throughout the negotiation process. If you are not a tenacious, skilled negotiator, you may fail to get the outcome you want. You must evaluate whether or not you have those skills.

Benefits of Hiring a Firm

The main benefit of hiring a debt settlement service is the ability it gives you to turn the negotiations over to someone else. You do not have to make phone calls, write letters, or deal with customer service representatives. Those who are skilled at handling those details can take the pressure off of you. This often leads to a better settlement, and for those who struggle to negotiate, using a firm makes it more likely that a successful settlement will be reached.

Cons of Using a Debt Settlement Negotiation Firm

If you choose a debt settlement firm, the primary con is cost. Negotiating a settlement with your creditors is not something the firm will do for free. You will pay, often based on the amount of your debt or your savings after the settlement.

Another potential con is the fact that some debt settlement firms are less than thorough. They are not emotionally vested in achieving a successful debt settlement negotiation, as you would be, and thus they may not work as quickly as you want. They also may do little to protect you from legal action, which is your creditors’ right if you are not paying back your debts during the negotiation process. However, if you choose a quality company with a good reputation, these are not as much of a risk.

The bottom line is this: if you are good at negotiations, you may be better off settling your debt on your own. If the thought of calling your creditors makes you feel anxious, then take time to find a good debt settlement company to help you through the process.

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