Legally eliminate Debt With Credit Card Debt Settlement for Unsecured Debt

Legally eliminate Debt With Credit Card Debt Settlement for Unsecured Debt

After reading this article you should be able to make a determination as to whether debt negotiation and settlement is the right solution for you.

What is credit card debt settlement? Essentially, it is a negotiation between you and a lender to reduce the amount that you will pay. A lender will only consider a settlement if they believe that you may file bankruptcy. In this situation, they will be very happy to accept a portion of what you owe them rather than risk getting absolutely nothing to legally eliminate debt.

Who is a candidate for credit card debt settlement? Creditors will not consider settling the debt unless you're significantly behind on the account. just being 10 or event 30 days behind isn't going to be enough to convince them that they are at risk of getting nothing. The creditor must believe that there is genuinely a possibility that you will default on the account and leave them empty handed.

Most likely they will require that you provide them with financials and they will pull your credit to see if you're behind on other accounts. Convincing creditors that you are truly having financial hardship and that there is a possibility that you will file bankruptcy and that they will get nothing is a key component to success with credit card debt settlement and legally eliminate Debt.

What can you expect if you enter into a credit card debt settlement? Credit card debt settlement is not going to happen overnight. Depending on the lender, it could take you six months or year to reach a settlement agreement. Now of course, if all parties are motivated it could happen much quicker and than this.

Once you've reached a settlement you can expect to pay anywhere between 40% and 60% of your initial bounce. The creditor will report the accounts to the credit bureaus as a zero balance, but it will show as having been settled for less than the amount owed.

Maybe you are thinking that it would it be easier just to go ahead and file bankruptcy. After all, if you go the debt settlement route, you will have to pay between 40% and 60% of the balance. Having your debts wiped out by a bankruptcy may seem very attractive to legally eliminate Debt.

The reality is that it is not as easy as it once was to file bankruptcy. If you've got us a stable income and are not seriously in debt, chances are you'll be required to file a Chapter 13. While if you file a Chapter 13, you will likely pay far less than 40% to 60% of the balance that is owed, there are significant fees that are involved in filing bankruptcy that you will need to consider. They include: filing fees, court fees and attorneys fees. All of these can add up to a significant amount.

Additionally, as far as rebuilding credit it will take you far less time to rebuild credit after debt settlement. Another thing to consider is the bankruptcy will stay on your credit file for 10 years where as debt settlement will only stay on your credit file for seven.

Credit card debt settlement isn't for everyone, but it can be a good solution and a last alternative before bankruptcy. Now that you understand what credit card debt settlement is you know how to legally eliminate Debt.

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