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A debt specialist assists debtors in resolving contractual obligations to a creditor. He or she may work with consumers who need educational and legal assistance in resolving debts. Some who work in this area of expertise are employed by companies that have a need for in-house staff to oversee debt and collateral management. Another responsibility that may fall to someone working in this field is helping to ensure the liquidity and solvency of a corporation. Sometimes, a debt specialist assists in corporate dissolutions and acquisitions.
Incurring an obligation to repay a debt typically involves the signing of a legal contract that stipulates repayment terms. When a consumer is in danger of defaulting, or has already defaulted on a promise to pay a debt, legal consequences usually ensue. A professional who works in this area is expected to be knowledgeable in both the contractual obligations of a debtor, and the legal options that the debtor may lawfully exercise for relief. Sometimes, consumers do not understand how to resolve a debt, and may even make things worse by delaying a solution, thereby triggering more penalties, which can snowball. A debt specialist will often explain to a debtor the options he or she may have in better managing the debtor-creditor relationship.
There may be character issues involved, as a debtor might have capacity to pay, but instead, is irresponsible and chooses not to. Sometimes, a debt specialist may provide credit counseling and education on how to manage finances. He or she may have legal expertise, or may connect the consumer to someone who knows how to lawfully resolve the debt.
During the debt-resolution process, the debt specialist typically advocates for a workable solution that will not leave the consumer in severe distress. For example, a person in this field may work with a creditor toward achieving a compromise in resolving a debtor's obligations. This allows a debtor to repay debt, while still ensuring enough cash flow exists to pay other debts. In this way, essential items — like an automobile — are not repossessed.
On the commercial side, someone working in this field may manage the debt incurred in the normal course of a business’ financial transactions. He or she may manage collateral programs, and other monetary transactions that enable commercial enterprise to flourish, such as with the swap market. A debt specialist in this capacity would also typically oversee transfers of money, and ensure proper reconciliation of company accounts with creditors. When a corporation or business faces insolvency, a debt specialist may be brought in to sort out the often complex financial transactions that may have occurred. In this manner, he or she does the preparatory work that allows the corporation to be legally acquired by another company, to go insolvent, or to disincorporate.