Debt negotiation is a relatively new form of debt relief that is gaining popularity because of its results in reducing credit card and personal loan debt and because the process can also help homeowners Avoid foreclosure by increasing the likelihood of home loan modifications being approved. One focuses on pending agreements, credit scores, and direct negotiations, while the other focuses on the practice’s short- and long-term benefits.

Debt negotiation will likely lower the borrower’s credit score starting the debt negotiations, but it depends on what that score is when the process begins. The vast majority of borrowers who start debt negotiations are already in default, and therefore their credit ratings are affected, so the negotiations will have a manageable impact. The second problem with credit ratings is that transactions remain on record for up to seven years. While this may be true, doing nothing indefinitely leaves cancellations and open balances on the record. Accounts that are completed, settled, and ultimately closed reflect a much better credit report than accounts that appear deliberate and ignored.

Borrowers can initiate direct negotiations and may be contacted by their lenders to do so. One of the problems with direct circulation is that, as a rule, it is necessary to trade several accounts, and all of them must be carried out independently of each other. The second problem is that direct negotiations often offer lump sum payments or payments within a few months of the agreement. These payments are usually not feasible for the borrower, especially if more than one lump sum agreement is entered into simultaneously.

The benefits of debt negotiation are as follows:

Immediate relief: Once debt negotiations begin, the borrower will experience an approximate 50% reduction in payment obligations on all accounts involved. Discounts may vary depending on the solvency of the borrower. By making payments above the 50% reduction, the borrower can pay off contract balances more quickly.

Debt balances are reduced: Depending on the lender, balances can be reduced by 60% or more. The average discount on the total amount for negotiations that cover several invoices is 50%. Once contractual balances are settled, invoices are considered paid in full with no further obligation of the borrower to the lender.

A wide range of accounts can be negotiated: Debt negotiations can include credit cards, underwriting loans, department store debt, unpaid medical bills, unpaid utility bills, and more. It effectively allows the borrower to wipe everything from scratch without the disadvantages of filing for bankruptcy. Read more at


Payment of all debts within four years. As consumers accumulated credit card balances over time, making payments that significantly reduced their principal balance became difficult, if not impossible. Full repayment can take twenty-five years or more for those who can only afford the minimum payments.