subject: Debt Settlement FAQ Do Debt Settlement Programs Actually Work? [print this page] Debt Settlement FAQ Do Debt Settlement Programs Actually Work?
I am sure that you are familiar with debt settlement. You heard about it from a few of the many consumers that benefited from these services or you just read about it online. If you have some uncertainties about the way a debt settlement program actually works, this article will answer some of your questions.
How does a settlement work?
Debt settlement implies negotiation with the creditors and the main goal is to reduce the total amount of debt. This is where most consumers don't understand. The creditors have never made a name for themselves as being merciful so it doesn't seem like they would just accept to take less money from their clients actually the opposite. The creditors won't reduce your debt out of mercy but will just look out for their best interest; that sounds more like the creditors we all know. The point is that debt settlement is usually used as a way to avoid bankruptcy; if the creditor doesn't agree to reduce your debt and you are forced to use bankruptcy than you won't be giving them back anything from the money you owe. This is available only for unsecured loans; here you can fit personal loans and credit card loans.
After you settle your debt, you will make monthly payments at lower interest rates for a couple of years until you pay back the rest of your debt. The low interest can guarantee that you won't end up in the same amount of debt again, you will just have to stick to the payment program offered for 2 years.
If you are wondering how stimulus money helps you clear debt, it is very easy. Stimulus money is given to credit card companies to encourage them to accept negotiations. So, you don't have to waste much effort into negotiations and get the best deal for your debt. It is the best time to take advantage of these great facts and clear debt.
Do debt settlement programs actually work?
Yes. The large number of consumers that used this option and are now clear of debt are the best proof for this fact.
Debt settlement is a viable alternative to filing bankruptcy. Most consumers are able to eliminate at least 60% of their unsecured debt while avoiding many of the negative consequences with filing bankruptcy. If you are over $10k in unsecured debt you will be eligible for debt settlement.
