Settle Debt For Less - How You Can Realistically Only Pay Back 50% of Your Credit Card Debt

With a sudden spurt in the number of debt settlement companies in business

, you must have seen advertisements that claim to settle all your debt worries. Have you given a thought about how this can be possible and what are the methods used to achieve a whopping 50% discount? Read on to understand the process. Improving your knowledge in debt settlement will help you choose a debt settlement firm to 'realistically' get a fair discount on your bad debts.

Let's get started by understanding the reason why a debt settlement is offered. When a debtor starts to default payments a creditor initiates a debt recovery process by first sending intimations to the debtor. These intimations are used to remind the debtor that he has to start making payments as there have been some defaults. The creditor increases the interest rate and levies late payment charges which tend to increase the total debt due. If the unsecured debts have increased to such an extent that, it is not manageable by the borrower, he can threaten the lender with bankruptcy.

This is not beneficial to either party as the creditor does not receive any payment and the debtor loses his credibility. Moreover declaring bankruptcy will drastically lower the credit score and can remain on your credit report for 10 years. This is the primary reason why a debt settlement is an amicable solution.

If you have a huge amount of unsecured debts you should seriously mull over paying off your debts as soon as possible, thus avoiding the accrual of exorbitant fees levied by the creditor. At the same time it is not possible to pay all bad debts in full. You should start the debt settlement process by immediately contacting the creditor by either meeting a representative in person or writing a debt negotiation letter with a clear communication on why you are eligible for a debt discount. The creditor will study your current financial situation and past records to asses the amount of rebate that can be offered. You can get discounts ranging from 30 to 60%, depending on the amount of debt you owe and the effectiveness of the negotiation. An effective negotiation strategy should be pre-planned before you approach a creditor. This is best done by debt settlement companies who specialize in this business. However, do not blindly believe their claims. Be convinced that you get value for your hard earned money. Select the best and put your reservations to rest.

Settle Debt For Less - How You Can Realistically Only Pay Back 50% of Your Credit Card Debt

By: Brigham Baldwin

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