Debt Settlement

Debt Settlement

Do you have access to a lot of cash, just not enough to pay off your debt in full? Can you contribute the money that you are currently paying your creditors towards a solution to your debts? You might be a candidate for debt settlement. Credit card debt settlement works by paying money into an escrow account at the settlement company, which is used to negotiate a settlement in full for a partial payment, granting you substantial debt relief.

Settling Up

Hypothetical situation (or not): You have a lot of debt. You want to buy a house, but you've missed some of your credit card payments and your credit is suffering for it. You need to get out of debt, and you need to do it quickly. Let's say you've saved up $8,000 so far for a down payment on that house you want. Well, you could enroll in a debt settlement program, but you can kiss that cash goodbye (or at least a big chunk of it). Through debt settlement, a professional negotiator from a debt settlement company will contact your creditors to get 60-80% shaved off the amount you owe. The agreement with your creditors is that you pay off the new, lower amount in full and immediately. The way they see it is you've missed some payments, and they know they might not see the balance of what you owe. Through debt settlement, they get at least some of what you owe them, and they figure something is better than nothing. However, that's why they want to be paid in full and immediately. In addition, it will effect your credit record in much the same way as a late payment does. Some debt settlement companies will get you 1-3 years to pay it off though. It all depends on how good the skills and abilities of the debt settlement service you choose.

Still on the fence about debt settlement programs? Contact a debt management company! They can tell you about other debt management programs that are a lot better for your credit than debt settlement, like debt consolidation, debt consolidation loans or debt consolidation mortgages. If you have no resources, just debt, debt consolidation is your only option besides debt settlement. But if you have collateral or a house, any of these options apply. Check them out.

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