The Simple Idea That Could Revolutionize Debt Relief
It is truly incredible how progress occurs. One seemingly small idea can change the entire world and the direction of its habitants' lives. Not every breakthrough is as revolutionary as the printing press or the internet, but nonetheless, their impacts can be profound. One such revolution may have just occured in the debt relief industry.
Traditionally, consumers that are severely indebted have had three bankruptcy alternatives to choose from: credit counseling, debt consolidation, and debt settlement. The revolution that is potentially on the horizon could mean the end of all three; and it's all because of an innovative new program called "debt restructure." Essentially, this is because debt restructure offers consumers the upside of the three traditional programs which consumers previously had to choose between.
Credit counseling and debt consolidation are often elected by consumers because they make monthly payments more manageable and inflict limited damage on credit ratings. The downside is that the debts still carry a sometimes overwhelming burden that can persist for decades. On the other hand, consumers might choose debt settlement because it offers the advantage of significantly reducing a debt, and allowing it to be paid off in a matter of years. While attractive, debt settlement turns away many consumers due to the credit damage endured throughout program enrollment.
The debt restructure program allegedly offers the best of both worlds. Like debt settlement, debt restructure involves the negotiation of debt with a consumer's creditors. The only real difference in the two programs can be found in the negotiation process. In debt settlement, the consumer refrains from making payments on their debt until enough money is saved to offer as a settlement. It usually takes a few years to save enough money, and it is during this time that the severe damage to credit scores is dealt. Debt restructure has circumvented this prolonged period of non-payment with the introduction of what is called a "debt buyer."
The debt buyer is a third party investor that agrees to purchase the consumer's debt from the creditor at a settled rate soon after enrollment in the program. The consumer than makes monthly payments to the investor until the settled debt is paid off. Under this process, the consumer's debt is not only significantly reduced, but there's no proloned period of credit score damaging non-payment. Ultimately, this means that the debt restructure program has combined both advantages of the traditional debt relief services, while adding no new risks or hazards.
Since debt restructure is still in its infancy, it's impossible to tell how effective it will be, and whether it will have the success that is anticipated. On paper, however, it looks like the program will inevitably absorb a majority market share from the existing debt relief services, and possibly even push them out of viability. In any event, the program is certain to have a significant impact on the debt relief industry and the consumers that seek it's solutions.
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