As the number of bankruptcies filed has grown by five times over the last 25 years, according to the Federal Reserve, "debt settlement" has become the popular alternative. The question is: To negotiate one’s own settlement, or to seek professional debt settlement assistance?

"Debt settlement" refers to the process of negotiation, as well as the mutually agreed upon lower-than-original settled amount. In the face of financial hardship, should a consumer file bankruptcy, the creditor gets paid little if anything. Through settlement, we can provide both creditors and debtors with workable solutions that are beneficial to both parties,” says Todd Hayes, Managing Director, Precept Financial Solutions, the first debt settlement company to be admitted to the American Bankers Association.

The main pitfalls of negotiating one’s own debt, plus associated benefits one may expect from a professional debt resolution service are:

1) Lack of Leverage of an Individual Against a Barrage of Creditor Companies: A debt settlement company’s status as a company and its relationships with creditors add strength to the company’s position in negotiating settlements on behalf of their clients.

2) Needing to Get to the Right People: The chances of being transferred to the appropriate persons inside the creditor organization in a smooth and timely manner are low for the individual, and extremely frustrating. A debt settlement company already has the contacts and goes straight through.

3) When Creditors Claim Agreement Not Final: A debt settlement company knows how to make an agreement stick.

4) Not Making an Informed Decision on Debt Settlement Company Fees by Neglecting to Actually Find Out: Fees vary from case to case. It is best to call and speak directly to a debt assistance specialist, who will help the caller identify their best option, and explain how fees would work if they qualify for debt settlement. Generally, even with fees, debt settlement companies can save their clients up to 50% off the original debt, and be debt free in about 36 months, which is shorter than any other alternative.

For an individual personal or business debt solution analysis to help find one's best debt resolution option, visit Precept Financial's home page or contact a debt specialist at the number provided below.

To learn more about debt settlement, please visit Debt Consolidation Care.

About the Author:

Kasia writes about financial issues.