Debt Consolidation

Custom Search

Debt Consolidation
Debt Relief
Debt Recovery Can
What Are The
Purchase Your Future
Debt Relief with
Drowning in Debt?
What the Mail
Five Major Ways
Free Quick and
Free Quick and
Creating A Realistic
Hide That Car!
Dealing with 'Thing'itis
Should You Invest
The 5 Secrets
Mr. Cheapie's Frugal
Start Small and
Debt Collectors; And
Bankruptcy, Is It
Top Ten Reasons
What Is A
Is There Any
What Is A
Debt Collectors: Men
Personal Debt Reduction
Take Careful Consideration
Life After Debt
How To Get
Currency Trading Fee
What is Debt
Assess Your Financial
Why You Should
Debt Validation: Do
Bankruptcy: What You
Bankruptcy As An
Bankruptcy: Which
Debt Consolidation
Debt Relief
What is Debt Settlement and How Does it Work?
by Alan Barnes
Debt settlement involves negotiating with a creditor or creditors to pay off a percentage of your total debts at an agreed upon settlement amount. Often, people choose to utilize the services of a debt settlement company rather than attempting to

Debt settlement involves negotiating with a creditor or creditors to pay off a percentage of your total debts at an agreed upon settlement amount. Often, people choose to utilize the services of a debt settlement company rather than attempting to do it on their own. Debt settlement companies traditionally employs various negotiation strategies to help settle your debts and can eliminate between 40-60% of your original balances.

Being the president of a debt settlement company, I am often asked how debt settlement works. In order to fully understand and appreciate the process that takes place between debt settlement companies and credit collection agencies, consider the following: Creditors know that roughly 30% of the 1.5 million bankruptcies that occurred last year were on debt that was reasonably current. Traditionally, people survive by borrowing from one creditor to pay another. However, this process eventually fails when consumers run out of available credit lines and find themselves unable to make their minimum monthly payments.

If a consumer files for bankruptcy, it is very likely that the creditor will receive nothing of the balance that is owed to them. Therefore, a creditor is better off negotiating with a debt settlement company. Most debt settlement companies work with customers that have legitimate financial problems and honestly need assistance.

The debt settlement process usually takes between 12 to 36 months, so consumers can wait for creditors makes the sensible decision to agree and negotiate. Besides the obvious benefit of debt settlement, another benefit is the help with creditor harassment. Debt settlement companies normally contact all your creditors and inform them that you are working with a debt settlement company and that you are now being represented. This is very important in that it helps minimize or eliminate creditor calls. The standard practice is to direct all communication to the debt settlement company that you are working with. However, it is important to remain cognizant of the fact that original creditors can still contact you legally, but most will comply with such requests.

The most important part of debt settlement is to complete settlement process with your creditors and or collection agencies. In order to do this, it is necessary for a debt settlement company to have you sign a contract and a document that legally authorizes them to negotiate with your creditors on your behalf; this is known as a “Limited Power of Attorney.” During the settlement process, you will make a monthly deposit into a "settlement account" that will eventually be used for your debt repayment. As funds begin to accumulate in the account, the debt settlement company will start to negotiate with your creditors. Once a debt settlement offer has been agreed upon, you will need to send that amount, directly from your account, to the creditor. Once the payment has been made, that debt is considered settled in full. You will no longer owe anything on that debt and the account will be closed.

Alan Barnes
IAPDA Certified Debt Arbitrator
President and CEO of Debt Regret

The site is not responsible for any content in it. E-mail: alldir[at]gmx[dot]com
debt consolidation, home loan, mortgage, debt free, debt help, refinance, equity loan, unsecured, secured debt, bankruptcy, credit card , bad credit, payday, cash advance, cash settlement, line of credit, student loan, interest rate, borrow money, car loan, adverse credit, compensation, quote, credit score, consolidate debt Balance of Middleport township Balance of Hanover County Galien village Edison village Skaneateles town Port Isabel Forest Hills village Kittanning borough Balance of Marshall County Garrison Rome village Abita Springs town Balance of Plum Hill township Bremer County Lone Star Brandon Edgerton town Northampton town Acworth Garrard County Woodward township Balance of Maroa township Macclesfield town Park Forest village (pt.) Riverdale Channahon village (pt.) DeRidder Winnebago Claremont village Adrian township USA UK Australia Canada Serbia Philippines Nauru Ascension Cote d'Ivoire (Ivory Coast) Mali Bolivia Turkmenistan Nicaragua Seychelles Buteshire Northamptonshire Dunbartonshire Worcestershire Denbighshire Pembrokeshire Banffshire Berwickshire Kincardineshire Armagh New Mexico (NM) West Virginia (WV) Mississippi (MS) Maine (ME) District of Columbia (DC) Virginia (VA) Idaho (ID) Vermont (VT) Ohio (OH) Alaska (AK) Minnesota (MN) Kansas (KS) Minnesota (MN) Oregon (OR) Delaware (DE) Vermont (VT) Louisiana (LA) West Virginia (WV) Washington (WA) Iowa (IA)