Can Debt Settlement Reduce Debt by 40% or More?

Debt settlement is a process where your outstanding debts are eliminated through negotiation with your creditors. You are required to pay only a portion of what you originally owed your lender.

So why will your creditors agree to settle your loan at a reduce amount? Because they are protecting their investment. If you were to file for bankruptcy, they stand a chance of not collecting a dime from you. By settling with you, they can at lease get some of what they are owed. When debt settlement companies get involved, the creditor has less to worry about. They know that you want to repay your debt even if it’s not the full amount. They also save on collection agency and collection attorney charges which may be as high as 40% of the funds recovered.

Debts can be settled for as much as 40 – 70% of what is owed. 

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.

When it comes to the debt settlement company’s fees, make sure you pay them only after the settlement is completed fully. Some companies tend to charge you large upfront fees and some would try to make you pay a monthly fee every month until the settlement is made. So buyer beware, know what you are getting into.

Before you do anything, see our debt settlement/negotiation company review to see if you can reduce unsecured debt.

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