Economic Downturn Drives Growth in Debt Resolution

This historic economic crisis is fueling growth among debt resolution firms as more troubled consumers burdened by unsecured debt seek help in reaching repayment agreements with creditors.

Consumers failing to qualify for the type of creditor concessions provided by routine credit counseling often contact debt resolution companies and law firms, which negotiate with creditors to reduce debt by cutting interest rates and fees and by reducing part of the principal owed. The consumer agrees to repay all or part of the original debt in a lump sum or through a series of payments to the debt resolution company, which retains a portion for its fee.

Debt resolution fees can range from hundreds to thousands of dollars, depending on the debt, say industry observers.

Credit Card issuers are becoming more open to resolving debts through debt resolution firms, as they try to reduce their ratio of charged off loans.

JPMorgan Chase & Co. confirms that when it is directed to do so by its customers, it will enter into negotiations with debt companies.

Credit card issuers growing willingness to agree to feasible "terms set by consumer," which enable borrowers to make monthly payments to the creditor through the debt resolution firm. This differs from the more traditional arrangement of repaying the renegotiated debt in a lump sum.

Almost all credit card debt resolution plans are now handled through installment payments.

Although certain unscrupulous debt firms tarnished the industry's image by charging excessive fees and sometimes failing to deliver services, bringing negative light to the industry.

Self Logix has been actively working to rebuild consumer trust. Self Enrollment Debt System (SEDS) has revolutionized the debt industry by bringing transparency and legitimacy to the industry.

SEDS allows debt burden consumers to choose on there own feasible repayment terms.