subject: Make The Most Of Debt Settlement - Do You Understand How Debt Settlement Works? [print this page] I am sure that you heard about debt settlement either a friend told or you read about it on the internet. This debt relief option has become quite popular since the recession and it keeps catching the attention of more and more consumers every day. A simple search on the internet will reveal what debt settlement is but not all articles are accurate and the information may differ a bit.
Debt settlement is a debt relief option that is used deep unsecured debt and can reduce this amount by a significant percentage. If done right, the reductions can be between 50-60% and there also have been cases of bigger reductions. The amount of debt must exceed $10k and you will also need to have suffered a salary cut or something similar. This debt relief option is mostly used by consumers that suffered from the recession and now struggle with big amounts of debt.
Debt settlement is based on a simple process and that is negotiation. You get to talk with the creditors and explain you current situation. Creditors fear that you might file for bankruptcy and so, give them nothing in return. They might sue you but most of them choose to avoid that situation and negotiate if the consumers first suggest it. When they settle your debt, you will pay them back a part of your loan and they will also get another part from government founds in the form of stimulus money. As you can see the creditors have as much of a reason to accept a deal as the debtors do.
When the negotiations are done, you will need to pay the debt settlement company. This can be done in a few installments or all at once if you managed to save some money; then you move on to paying the creditors. This will require you to save money for the next few years because most creditors will ask for the rest of the debt to be paid in a lump sum. A settlement account is opened for this purpose and you should have the money you need in just two or three years.
Debt settlement is a viable alternative to filing bankruptcy. Most consumers are able to eliminate at least 60% of their unsecured debt while avoiding many of the negative consequences with filing bankruptcy. If you are over $10k in unsecured debt you will be eligible for debt settlement.
Make The Most Of Debt Settlement - Do You Understand How Debt Settlement Works?
By: Conrad Corwin
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