Debt Settlement

Debt settlement can be a good solution to your debt problems. If you carry more than $10,000 in unsecured debt and struggle with, or are unable to make, your monthly payments, consider debt settlement. A negotiated settlement can significantly reduce your debt, but it will impact your credit score. It is not an easy experience for everyone. Debt settlement offers a low monthly program payment, sizable debt savings, and short time to debt freedom, but there’s no gain without some pain.

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What is Debt Settlement?

Debt settlement, also called debt negotiation or debt resolution, is a process where settlements are negotiated with your unsecured creditors, where they agree to forgive a part of your debt, frequently saving you between 40% to 60% of what you owe. Results can vary widely.

After a settlement is reached, you pay the reduced, agreed-upon sum. In some cases, you will pay this settled balance in payments, over a structured period of time. More frequently you pay off the reduced balance in a lump-sum payment.

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Contact one of Bills.com’s pre-screened debt help providers for a free, no-obligation debt relief quote.

Debt Settlement Pros and Cons

Debt Settlement Companies

Although some people decide to do a debt settlement on their own, it requires time and skills that are best performed by a professional. Only work with a debt settlement firm that does not charge up-front fees. Any debt settlement firm that telemarkets its services is not allowed to charge up-front fees. Lawyers and debt settlement firms that meet with clients face-to-face can charge up-front fees.It makes no financial sense to work with any firm that charges you fees in advance, when you can find reputable, experienced settlement firms that won’t charge you a fee for any account they settle until after the settlement is finalized. A firm that charges you for their services only after an account is settled has a higher motivation to settle your debts.

Reputable Debt Settlement Companies

It is important to find a debt settlement company with experience that translates into strong connections with the creditors and a reliable service department. In order to find a reputable debt settlement company look to see if they are accredited by the American Fair Credit Council. The AFCC has strict codes of conduct and monitors their members for compliance to FTC rules. In addition, check out provider reviews and the Better Business Bureau.

Debt Negotiation Options

If you have decided that debt negotiation is the right debt relief option, then your next step is to decide if you should do it yourself, or seek out a professional debt settlement company. It is important to be in contact with your creditor as soon as possible. This is especially true with secured debt, such as a mortgage. There are many benefits to choosing a professional debt settlment company that can help you evaluate your financial situation and get you to the finishing line.