Debt Settlement

Debt Settlement, also known as Debt Negotiation, is a type of program for consumers who are overwhelmed with unsecured debt. It is an alternative to bankruptcy for people with substantial unsecured debt – over $15,000 – and little ability to pay it off on their own.

A debt settlement program will settle each account for a greatly reduced amount, usually about fifty to sixty cents on the dollar. Depending on the total amount owed and the clients ability to pay, it usually takes somewhere between 6 and 36 months to completely settle and pay off all of a client’s debt. During this time, the client makes monthly payments, usually into a trust account, until sufficient funds have accumulated to initiate settlement activity. Each debt on the program is settled, one at a time, usually from largest to smallest, until all have been settled and nothing else is owed.

Debt Settlement allows debtors to pay off their debts in a shorter time than Consumer Credit Counseling because the amount owed (principal) is reduced, not just the interest rate.

Is Debt Settlement right for you?

If your total unsecured debt is more than $15,000, and you cannot make all of your monthly payments each month, or cannot pay more than the minimum monthly amount to reduce the principal, then Debt Settlement may be right for you. If you are considering bankruptcy because of your credit card debt, and want to avoid it, then Debt Settlement is almost certainly right for you.