How Does Debt Settlement Work? ...
And Is It Right For You?
If you're overwhelmed by credit card bills & there seems to be NO WAY OUT of debt - then debt settlement might be just what you're looking for (& even help you avoid financial disaster!)
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Has credit card debt got you so discouraged that you don't know how you'll ever find a way out of financial trouble?
Then credit card debt settlement (also called debt negotiation) may be right for you. In fact, I saved $9,937.40, a reduction of nearly 40% - and paid off all my credit card bills in less than 2 years - using debt settlement.
If you're starting to think about bankruptcy, and you're having trouble sleeping at night, then this might be the right strategy for you. Because, you definitely won't get out of debt...
Making minimum payments each month
Paying high interest rates & outrageously high late fees and over-limit fees
Transferring balances between credit cards all the time
How Does The Debt Settlement Process Work?
And Can It Really Help You Save 40-60%?
Debt settlement is a process where you negotiate with your creditors to pay off (or settle) all of your credit card bills at a reduced amount - often at a savings of 40-60% from your original balance.
Whether you decide to enroll in a professional debt settlement program or negotiate settlements with your creditors on your own, the process is the same. The settlement company will require you to sign a limited power of attorney, so they can negotiate on your behalf. You'll then need to set aside money to build up a settlement fund. Once you've saved enough to make a reasonable settlement offer, you or the professional debt negotiator will negotiate with the creditor for a reduced payoff amount, typically between 25% and 50% of the outstanding balance.
Once the creditor agrees to the settlement amount, you make payment and the account is paid off. (typically listed as settled-in-full, as opposed to paid-in-full, but is determined by the creditor). You then continue putting money into the settlement fund to accrue enough money for negotiating the next settlement. Basically, the process is a cycle of saving up and setting aside money, negotiating a settlement and paying the settlement. (For more information, find answers to your most frequently asked questions about debt settlement)
How Is Settling Your Debt Different From Other Debt Reduction Programs?
These days getting into credit card debt has become very easy to do. And if you don't know what to do once your bills start piling up, trying to get out of debt is nearly impossible! After building up a LOT of credit card debt (from a business that didn't quite work out) and looking at all of my options:
Credit counseling ... debt consolidation loans ... even bankruptcy ...
The debt reduction strategy I finally decided to use (which the credit card companies definitely do NOT want you to know about) was debt settlement.
Here's how debt negotiation and debt settlement compare to other credit card debt reduction techniques:
Credit counseling only reduces your interest
Debt acceleration (paying off high interest bills first) is helpful, but your interest rates remain high
Transferring your balances all the time to different credit cards you get in the mail may make you feel better, but it won't really help you get out of debt in the long run. (And if you don't cancel the cards, it may even get you into more debt!)
Bankruptcy can help you get out of debt faster, but because of the implications, in most cases should only be used as a last resort
Which Debt Settlement Companies Do We Recommend?
When choosing a debt settlement company, it is a good idea to shop around and compare. Here is a quick summary of how to find an honest & reliable debt settlement company. Want to find out if debt settlement can help you fix your financial problems?
But, if debt negotiation does not sound right for you... You might want to consider a more traditional debt reduction program like debt consolidation (or credit counseling). You might not get out of debt as fast. But you can still lower your interest rates - maybe even lower your monthly payments - and still get out of debt faster and save you a lot more money than doing nothing!
If you have any questions, I am be happy to share with you my experiences using debt settlement, and how it worked for me. Just send me an email (support@debt-tips.com) with your questions and concerns, and I’ll get back to you as soon as possible. Then you can decide for yourself if debt settlement is right for you!
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