How Life Works

Last Updated: 10/20/2014 16:10 PST

How to Break Your Cycle of Debt

How to Break Your Cycle of Debt

If you’re struggling with $10,000 or more in debt and going through a financial hardship — such as divorce, a job loss, medical emergency, delinquent student loans, etc. —you’re not alone. 

According to the American Payroll Association, 2 out of 5 Americans are living paycheck to paycheck, and 46% are carrying credit card debt.

No wonder it's so easy to slip into a cycle of debt —pay a little off, get a little ahead, then unreasonable interest rates or an unexpected expense knocks you back down. And, once you're in this cycle, it's incredibly hard to escape.

However, one truly effective way people are breaking free is by using a debt negotiation company.

Debt Negotiation — How It Works

Proper money management is essential for a person's well being. It not only reduces stress, it also helps form a solid financial foundation—both of which are vital for a family's long term well being.

Debt  negotiation is the process of negotiating with creditors so they forgive a big portion of your unsecured debt. Unsecured debt includes credit cards, some forms of student loans and most medical bills, but does not include mortgages or auto loans, student debt and taxes. 

Why would a credit card company settle debt for less than what you owe? 

When you are represented by a reputable debt  negotiation company, creditors know that they will be able to recover some of the money owed to them. To creditors, this is a better option than recovering little or no money if you are forced into bankruptcy.

Debt negotiation companies work with individual consumers to determine a reasonable monthly amount that they can afford to save in anticipation of paying off their debt. When you work with a debt  negotiation service, you set aside an affordable amount every month in a special-purpose account and, as these funds accumulate, the  negotiation company negotiates a final settlement amount for each debt. 

Typically, debt  negotiation companies negotiate on behalf of thousands of people every day, and the savings they obtain for consumers can be significant.

There are many debt  negotiation agencies, but one great way to start is by visiting National Debt Relief. They offer a free, no-obligation consultation that will help you evaluate your options. Then, if you chose to proceed, they will develop a plan that meets your specific needs and start negotiating on your behalf with your credit card companies.  

With the right plan, you can avoid hiring expensive loan counselors, borrowing money from family or friends, or destroying your credit by declaring bankruptcy.

Click here to learn how much of your unsecured debt is eligible for debt  negotiation, and how quickly you can be on the road to breaking your debt cycle.

This article sponsored by National Debt Relief Copyright 2014