Consumer Debt Settlements - How a Legitimate Debt Settlement Program Works

Consumer Debt Settlements - How a Legitimate Debt Settlement Program Works

Most people are casual about clearing their Credit card bills leading to such massive debts that they require special means of debt relief. Once the user is swamped with Credit card debt he has to look for ways and means of clearing his debt. There are many options open to Credit card users to clear their debt. Debt settlements are said to be one of the best options. Let us take a look at the process that takes place before a settlement.

Debt settlement is one method that is being said to be the most preferred method to clear debt. This concept is relatively new in the Credit card industry. The creditors and debtors agree for an out of court settlement to clear the dues of the debtor. The negotiations are held with the aim of reaching a settlement amount that is acceptable to both the parties.

The debtor has to give a written request to negotiate the debt. The creditors will take stock of the debtor's record before arriving at a decision. The following factors will be borne in mind before deciding to go in for the settlement:

How old is the account?

What is the net outstanding amount? For a settlement the debt has to be more than $10,000.

What is the record of payment of the debtor? This gives an indication of the finances of the debtor.

When was the last repayment done?

Are there any other Credit cards where the debtor has paid monthly installments recently?

Based on the answers to these questions the company decides to offer a debt settlement to the user. The user could be asked pay up part of the debt in lump sum and the balance is written off by the company. However if the company is convinced that the user has other means of income and does not need a settlement it may not agree for the same.

So go ahead and look for a debt settlement in your favor.

Debt settlement is a viable alternative to filing bankruptcy. Most consumers are able to eliminate at least 60% of their unsecured debt while avoiding many of the negative consequences with filing bankruptcy. If you are over $10k in unsecured debt you will be eligible for debt settlement.

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