Why Choose Settlement?

Is Debt Settlement Right for You?

If you have experienced loss of employment, illness, or some other life-changing event, you may be facing a huge mound of debt and need some debt relief assistance. There are several options available to you, but the best-kept secret in the industry is debt settlement. Debt settlement is a perfectly legal credit card debt elimination method that will allow you to reduce the amount of debt that you owe by up to 1/2 or more.

Debt settlement, or debt negotiation will require negotiating with your creditors, or paying a debt management company to do this, to settle on a dollar amount that you will pay in lieu of the full amount as a way to reduce your debt. This is one of the most painless debt reduction services available. The creditor will “forgive” the remainder of the debt. They are willing to do this, because they know that if you file for bankruptcy, they will get nothing, and they’d rather have a little than nothing!

So, how much are they willing to forgive? Banks and credit card companies may allow as little as 35 to 60 cents on the dollar, but in some cases you can do better. It will be very helpful if you prepare for this step by getting educated on the topic, and there are a few things to be wary of during negotiation. You might need some guidance and counseling, which will walk you through the steps of debt negotiation, and having an expert on hand can help to make it a much more painless process!

Are there reliable debt settlement companies to negotiate your debts? So many new companies have sprung up to make a quick buck off people in this growing industry, that it’s hard to say. First off, you should be prepared to pay a lot for their services. Their fee structures vary. Some companies charge a flat percentage of the total debt, up to about 20%. Others may charge a flat percentage, perhaps 25%, of the amount of debt that they have saved you. Usually you will pay a sign-up fee, and a monthly service charge, and the rest upon settlement. Other companies charge a flat monthly fee during the length of the program. It is very hard to estimate what this may cost you, until you do the homework of calling several debt management companies and comparing the costs. Recently, they have come under fire for fraud and misrepresentation. And there is a time limit, mandated by the FDCPA, which limits the amount of time you must settle your debts. If you do not pay all your settled debts during that time, the companies skate off with your money and they will be finished with you, no questions asked. If you must drop out due to financial hardship during your contract period with them, they get to keep the money you have paid in, and you wind up owing still owing your creditors. Save the money you would pay the debt management company to pay down your accounts instead.

The best option if you have decided that bankruptcy is not the proper step for you, is hands-down, do-it-yourself debt negotiation.