Debt settlement is one such debt relief option which helps the debtor walk away by paying as less as 50% of his outstanding debt and get out of debt. Many Americans are taking advantage of this program to make them debt free.
A debtor can negotiate a debt settlement all by himself or he can hire a reputed debt settlement company to do the job. The process is simple hence a customer can attempt to do it himself if the debt amount is less. But if the debt amount is more it is more prudent to take assistance of professionals as they are better at negotiating a good deal.
The customer will have to approach the credit card company and convince them of his financial problems. Once the creditors agree to settle his account, the debtor will have to give certain amount of money in exchange of the debt settlement. If he does not have enough cash in hand to negotiate the deal then he can open an account to save up some money.
A successful negotiation can get the debtor a reduction in the debt amount from between 40% to 60% of the total outstanding balance. With only about 50% of the total debt amount to be repaid it becomes much easier for most of the debtors to come out of their debt.
One must understand that this method does have its drawbacks. The credit rating will show debt settlement and will bring down the credit score. But even a missed payment will have a negative impact on the credit report. Also with this process in hand a lot customers can avoid bankruptcy which will have a much deeper impact on ones financial standing.
Their are several debt relief options available in this market so it would be wise to speak with a debt relief specialist to determine which option makes the most financial sense for you. Whether it is credit counseling, debt settlement, debt consolidation, or bankruptcy, a debt relief specialist will be able to steer you in the right direction.