subject: Charge Card Debt Options - How Do Credit Card Debt Settlements Really Function? [print this page] Debt settlement is a process which enables a debtor to pay only a percentage of his debt amount as the final settlement amount. The settlement amount which the creditors agree to may vary on various factors. Some of the common factors affecting the settlement amount are bankruptcy risk, who your creditor is, the amount of the debt etc. In any case this option of debt relief will help the debtor get a major load of his debt reduced.
A good negotiation can reduce a lot of money off the total debt that is owed.
Generally a debt settlement can get 40 % to 60 % of the debt removed from the original debt amount. The creditors believe that customers who have been behind in their payments eventually file for bankruptcy. The creditors do not want to lose money due to bankruptcy. If the account is about to be sold to a collection company, then the creditors will look forward to settle the debt with the debtors.
All creditors are interested in settling huge amounts of debt. A debtor can get debt settlement if he has at least ten thousand dollars in unsecured loan. The creditors believe that debtors will not risk a bad credit report for a small debt amount and will struggle to make his payments on time.
A debtor has to offer a certain amount of money as down payment to his creditors in exchange of a settlement. Let's say a debtor has $ 10,000 in unsecured debt and $ 5,000 has been settled by the creditors. The debtor will have to pay $ 5,000 to his creditors in a single down payment or over a period of few days. The main disadvantage of this method is the
Charge Card Debt Options - How Do Credit Card Debt Settlements Really Function?
