Debt Relief Options – When Debt Settlement Might Make Financial Sense For You

Settlement is a debt relief solution for people in a similar situation to this: Your credit card debt is high and you are not sure what to do

. The collection letters are threatening legal action and the phone calls keep coming. You are trying to find a way to pay your bills and not lose your mind in the process. It has been months since you made a payment and collection agencies are involved. You want to make a payment so you can get them off your back, but the problem is you literally don't have enough money right now. In this instance, you may want to consider debt settlement.

What is debt settlement? With this debt relief option, you or a professional debt settlement company that you choose would take a look at your current bills and balances. They then will try to work a plan where you could pay a lesser amount. There is a chance that you can pay 40-60% less than your balances that are due. You would not be responsible for the rest. The remaining amount of your balance would be considered paid in full or "settled". This is the way it would show up on your credit report.

You may be thinking, "Why would my creditors take less than what I owe and call it even?" It's simple. After a certain amount of time, unpaid balances are considered "bad debt" by the company's terms. At this point they are happy to receive any payment from you at all considering the fact that they were getting nothing. Companies are struggling just like you are. They want to get back on their feet too. For this reason, they are willing to work with you to come to a debt settlement agreement that benefits both of you.

How does it work? To put it simply, you and a debt settlement company will analyze your outstanding debts. Together, you will decide how much you are actually able to pay and how long it will take to pay it. Then, they work on your behalf to negotiate a settlement offer with your creditors. Your offer may be initially rejected, but the settlement company will continue to negotiate until an agreement can be reached. The negotiation process could take a few weeks, but in the end you will only have to pay a portion of your debt - an amount you can afford. The rest will be forgiven.

When do payments need to be made? During the negotiation process you will not make any payments. Once your creditors accept a settlement offer, you will begin making the monthly payments you can afford. How long you need to make these payments will depend on your agreement. Most times debt settlement agreements are for 12 - 36 months. What this means is that you make 12 - 36 affordable monthly payments and once your last payment is made, your settlement is paid in full.

How much debt do I have to be in? Most times you have to be at least $10,000 in total unsecured debt. This does not mean that you need $10,000 in one balance. This means that when you add up all of your credit card, personal loan, medical bills, and other unsecured loan balances, it should be $10,000 or more. Many people find that once they add up all of their credit cards, unsecured loans, and qualified bills, they are easily eligible for a debt settlement program.

If you think you may be eligible for a debt settlement program, it's time to get help. There are professionals that can assist you in getting your finances under control. The weight that will be lifted off your shoulders will have you wondering why you didn't do it sooner.

Debt Relief Options When Debt Settlement Might Make Financial Sense For You

By: Channing Blaine

POST COMMENT

American Debt Relief – How To Come Out Of A Personal Debt Crises Debt Relief Options – How To Capitalize On The Bad Economy And Eliminate Debt Can a Recent Income Loss Be Used As Basis For Asking For Tax Debt Relief? Debt Help For Consumers - How Debt Relief Companies Negotiate Settlement Deals Personal Debt Relief - How to Take Advantage of the Recession - Free Debt Relief Advice How to Take Advantage of the Recession and Get Out of Debt - Personal Debt Relief Personal Debt Relief Bailouts - How Obama's Stimulus Money Helps You Eliminate Debt Consumer Debt Relief Options - Do You Qualify For a Consumer Debt Bailout Stimulus Debt Relief - How Federal Stimulus Money Allows Debt Settlements to Be Easier What Are the Best Personal Debt Relief Solutions For 2010? Legitimate Options For Personal Debt Relief in 2010 Fast Debt Relief - Eliminate Debt in the Fastest Time Possible Personal Debt Relief - Critical Things to Consider Before You Opt For Debt Settlement