What is debt settlement and how does it help?

Debt settlement is a process where you pay less than your outstanding dues. Here, a debt settlement company or you negotiate with your creditors to cut down the outstanding balance. If your creditors don't give a nod to the debt settlement program, then you can threaten to file bankruptcy. And, this trick might work for you since creditors would want to recover as much as possible.

Debt settlement plan helps you:

  •  Settle your credit card debts fast
  •  Pay less than what you owe
  •  Save dollars and avoid bankruptcy
  •  Reduce annoying collection calls

How a settlement company helps you in settling your debts

Monthly payable amount:The settlement company analyzes your financial condition and decides upon a monthly payment, which you need to pay to the company every month.

Settlement negotiation:It negotiates with all your creditors to reduce the payoff amount to some extent.

Get rid of one debt:Once the creditors agree on a reduced payoff amount, the company makes the payment, and you get rid of the specific debt.

How to choose good debt settlement companies

  • Online support: Problems and doubts may crop up anytime. A good debt resolution company would provide extensive customer support to clients through apps, online chats, phone, emails, instant messages, etc.

  • Savings: Though what you save will mainly depend on your debt amount and the creditor, the best debt settlement company should be able to save you a significant amount on your credit card debts.

  • Transparency: A good debt resolution company would explain the debt settlement process clearly. The debt negotiators will tell you about their business policy clearly. They will tell you how much you have to pay for settling debts.

  • Fees: Good settlement companies charge fees as per the industry standard. They follow the FTC rules and avoid charging any upfront fees. They give a breakdown of fee structure to debtors.

Settling debts on your own vs. settling debts with professional help

  Settling debts on your own Settling debts with professional help
Negotiation You need to decide how much you can pay every month The settlement company analyzes your financial condition and decides upon an affordable payment
Mode of payment Usually you need to make one-time payment towards each of your accounts You need to pay an agreed upon amount to the settlement company every month
Fees You don’t have to pay anything other than the settlement amount to the creditors You need to pay a certain amount as professional fees
How to decide You want to save more money, but you should have proper negotiation skills to convince your creditors to agree to settlement

You want complete professional guidance to settle your debts, though you’ll have to pay a fee for the services provided