What is debt settlement?
So if you are reading this article there is a real good chance that your current financial situation does not look very well. The title in itself will only entice people to click and read this article if they are looking for a solution to their current debt problem and feel that debt settlement may be the right option but are not truly sure as to what exactly debt settlement is.
Debt settlement is also known as “debt negotiation.” It’s also sometimes referred to as debt consolidation, but that’s misleading since your debt is not consolidated in any way. Settlement programs have been around for many years, but the industry has been exploding recently as consumers find themselves deeper and deeper in to debt. With debt settlement, you negotiate to pay back a portion of what you owe, usually in a lump sum payment, to resolve a debt that you simply can’t pay back in full. While some ads may tout repayments of as little as ten cents on the dollar, a more typical settlement is somewhere around fifty percent of the amount owed. Here’s an example of how settlement can work: Jack owes a total of $50,000 on six credit cards. His issuers have been lowering his credit limits and raising his interest rates. In addition, he is no longer earning overtime at work, so he just can’t keep up with his minimum payments. He talked with a credit counseling agency, but the monthly pa
Debt settlement, also known as debt arbitration or debt negotiation, is an approach to debt reduction in which debtors and creditors agree on a reduced balance that, once satisfied, is considered payment in full. As long as consumers continue to make minimum monthly payments, creditors will not negotiate a reduced balance. However, when payments stop, balances continue to grow because of late fees and ongoing interest. If you need help getting out of debt, we recommend starting with a free debt consultation with a professional debt counselor.
