Debt Settlement Can Reduce Balances But…

Credit card debt is a major problem these days and medical debt is one of the major causes of personal bankruptcy. Many are at wits end, worrying about debt they cannot pay and many are looking at debt settlement as a solution to reducing that debt.

Debt settlement is a process where your outstanding debts are greatly reduced and you are required to pay only a portion of what you originally owed your lender. You could settle up to 40% – 50% of what is owed.

Debt settlement can have you debt free in a 12-36 months compared to years of paying high interest balances.

The way debt settlement works is you set aside a certain sum of money to build up a settlement fund. You don’t make your monthly payments to the lender, but instead you save it. After you have saved a certain amount of money you then start negotiating with them for a single settlement. Fees many continue to accumulate during this period.

Many companies will only work with consumers that have more than $10,000 in debt.

Lenders agree to settle your debt at a reduce amount because they can at lease get some of what they are owed. If you were to file for bankruptcy, they lose everything.

BUT, there are advantages and disadvantages to debt settlement. One disadvantage is that it gets reported on your credit report, but it still may better than bankruptcy and wiping out a good portion of that debt can be a big relief.

Find accredited debt relief company that is in good standing with the Better Business Bureau and also with trade associations. Also find a company that offers a free consultation.  They can help you decide which option is best. 

Need debt relief?  Check this out

Be Sociable, Share!