A serious illness or the sudden loss of a secure job is often the cause of over-indebtedness. But also private fatalities, such as the death of a partner or a divorce, bring people quickly into financial distress.

In order to prevent immediate execution or even the initiation of insolvency proceedings, an out-of-court debt relief should be attempted in a first step.

Properly and professionally carried out this measure can lead to complete debt relief. But what is a debt relief, how does it work and where can you find competent support in this difficult time?

1. What is a debt relief?

A Debt Relief is basically nothing more than a contractual agreement. The agreement is concluded between the debtor and the creditors concerned.

The content of the contract is the complete or partial cancellation of existing debts. In addition, agreements can also be made for a one-time payment or future installment payments.

The contract should be reviewed by an expert or co-authored with him prior to signing. This will ensure that the contract does not adversely affect your situation, but represents a real opportunity for a financial fresh start.

2. When do creditors vote for debt forgiveness?

If the financial situation of the debtor is hopeless and no improvement is to be expected in the foreseeable future, then creditors often agree to a debt relief. This can lead to a complete remission of debts or to a reduction of the remaining debt.

The latter solution is much cheaper for creditors than a private insolvency of the debtor. If there is a personal bankruptcy, most of the outstanding claims are lost. With a debt relief, the creditor often has at least the opportunity to receive a small portion of the outstanding amounts.

3. How do I get a debt relief?

The reduction of debt is a lengthy process that should be accompanied professionally. If you are in such a difficult situation, finding a debt counseling service is the first and most important step in the right direction.

The debtor advisor first determines all creditors and gets an overview of the outstanding claims.

In addition, he checks all receivables for their accuracy and also ensures that any partial payments made have been correctly taken into account.

As soon as the experts who work for the debt counseling agency get an idea of ​​the overall situation, they work together with you on an individual solution.

Thus, the debt counseling service can both take over the communication with the creditors as well as make a proposal for a debt relief.

The many years of experience of the experts contribute to reducing possible repayment rates and thus ensuring the best possible result for the debtor.

4. What should be considered?

Creditors have no obligation to approve a decree. Whether they do that depends on

• The economic situation,
• The contractual offer and
• Also from the negotiating skills of the debtor.

If there is no agreement between the debtor and the creditors, then the debtor usually only has the path to private bankruptcy.

Therefore, to increase the chances of a successful adoption, you should always seek professional help, because competent negotiation makes debt relief of up to 80% very likely.

If the debtor’s situation is also very problematic, as in the case of a serious illness, for example, a complete remission can be negotiated.