What You Need To Know About Debt Settlement Services

Millions of Americans today are in debt

Millions of Americans today are in debt. If total credit card debt in the US could be converted into $1 bills, there would be enough $1 bills to wrap around the Earth approximately 2.65 times. This astounding fact can be attributed to a multitude of factors, one of which is that, according to recent studies, 9 out of 10 Americans never seem to worry about credit card debt.

In the midst of this financial crisis, an increasing number of Americans have gone to debt settlement firms for help. From the name debt settlement services itself, you can tell that these services can help debtors out. But how exactly does debt settlement work?

Debt settlement is a process by which a debt settlement company reviews and analyzes your financial statues and then negotiates with creditors in your behalf. The debt settlement firm should come up with a payment schedule for your debt. If the negotiation goes well, debt settlement can be in the form of one of two things: your debt settlement service firm can draw up a lowered monthly payment schedule for you, or you can pay an amount of your total debt in cash and the credit company writes off all your debt. Debt settlement may be the quickest and cheapest way to get out of debt.

One should remember, though, that getting

debt settlement services isnt always an option. Since credit card debt and other unsecured debts are not backed up by collateral, debt settlement negotiations begin only when you have enough funds in your settlement account. Needless to say, debt settlement is only possible when you have enough to at least begin your payment schedule.

Another thing about debt settlement services is that nothing is definite, even after negotiations, until it is written on paper from your creditor. Make sure its not all talk and that you get this document from your settlement firm. It is always best to be safe.

Finally, debt settlement services do not come for free. Legitimate firms usually do not ask for payment before they finish settling negotiations with your creditors. And the fee is usually worth it, since you could not have settled debt issues with your creditors by yourself. However, there are scam firms out there just looking to make easy money from you, so its best to be careful.

by: Ethel Schaaf

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