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Debt Settlement – Is It For You?

If you’re seriously in debt and I mean seriously in debt, I am the bearer of bad news. There is just no pleasant way to get out from under that debt. No option is going to be as easy or as much fun as it was getting into debt. Now, I realize that many people are struggling with debt through no fault of their own. There are people who have had serious automobile accidents or illnesses or who lost their jobs as a result of the Great Recession. But the sad fact is that many people have gotten in trouble with debt simply because of bad choices. I can remember once in my younger days how I thought it would be fun to spend 10 days in Hawaii and charged the entire trip. Of course, I felt differently when I had to spend the next 12 months paying for that vacation.

What is debt settlement?

The online encyclopedia Wikipedia defines debt settlement as follows: ” Debt settlement, also known as debt arbitration, debt negotiation or credit settlement, is an approach to debt reduction in which the debtor and creditor agree on a reduced balance that will be regarded as payment in full.”

How debt settlement works

If you are deeply in debt, you may be able to use debt settlement or debt negotiation as a way to get out from under it. The way it works is that you stop making payments to your creditors for 3 to 6 months then contact them and offer to settle your debt for something less than you owe – probably 50% or 60% of what you owe.

Why your creditors might agree to settle

Once you get four to six months behind in your payments, most creditors such as credit card companies start thinking about selling your debt to a collection agency. These agencies generally pay only ten or twenty cents on the dollar for your debt so a 50% settlement offer can look like a reasonably good alternative. If you can convince your creditors that if they refuse to settle with you, you’ll file for bankruptcy this, too, can be a powerful motivator.

Cash in hand

If you are a good enough “salesperson” to negotiate settlements with your creditors, you will need to have the cash available to pay them. In other words, if you were to settle a $10,000 debt for $5,000, you would have to have the $5,000 available to immediately wire the lender or to send them in the form of a cashiers check. In fact, this is another selling point to your creditors – that if they agree to your settlement, they will be paid immediately.

What if you don’t have the money?

If you don’t have the cash to settle your debts, you could let us settle them for you. Our debt counselors have excellent relationships with the credit card and personal loan companies and are usually save our clients thousands of dollars. The way this works is that instead of paying your creditors, you will send us a check each month, which will be put into a FDIC-insured trust that you control. Once your creditors agree to our settlement offers, this money will be used to pay them off. You’ll have an affordable payment plan that should get you debt free in 24 to 48 months. Plus, you pay us nothing up front. We charge no fees until you have agreed to your payment plan and your creditors have been paid off.

Debt settlement can be a very effective way to deal with big debt. Call us today for more information on how we do debt settlement or fill out the form you’ll find on this page. Since this costs nothing, you have nothing to lose.

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