What is Debt Settlement?

What is debt settlement? This is the topic for today. When you think of debt settlement, most people think of credit card settlement, or settling on your credit card debt. Most people would rather go through a credit card settlement than pursue a bankruptcy. The actual definition for debt settlement, or credit card settlement, is the negotiation of lowering the amount of debt that you owe and paying a lesser amount. The creditor is called and you negotiate a deal to pay a percentage less than what you actually owe.

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You can also get rid of your credit card debt by doing a debt consolidation loan. But to do this usually requires you to have good credit. By the time you decide that you want to do a credit card settlement or a debt settlement on your credit card debt, you already have bad credit due to not paying your credit card debt on time.

When you decide that it is time to get some debt relief, you look into debt settlement. You will need to have a lot of patience when you go this route of getting rid of your credit card debt. First of all, most creditors will not allow you to even begin to offer a credit debt settlement amount until you are at least three or more months past due with your payment. This means that you will have to put up with the harassing calls from the creditors before you can get out of debt and have any real debt relief. They, the creditors, can get pretty brutal and convincing to get you to make a payment on the spot or to pay them for a credit card settlement now.

Credit card debt settlement needs to be looked at as an art form. You must be in negotiation mode and keep at it to get the best deal that you can. Creditors can settle anywhere from one percent up to eighty percent off of the original debt amount of what you owe. However, you need to keep in mind that to get the higher percentage of savings, you will need to not make a payment on the debt the longest. Most creditors can pursue you for the debt up to two years before they decide to sell the debt off as a charge off. The longer you wait to settle, the better deal you will receive. But you will have horrible credit as you go through this waiting time. If you do not want to have horrible credit during this time, I can suggest a couple of companies that can work on repairing your credit reports in the meantime. Check out the links below.

Now there is another thing that you need to be aware of when it comes to getting rid of your credit card debt to get debt relief. Most people can only do a credit debt settlement one creditor at a time. So if you have say, ten creditors that you owe money to, it may be awhile before you will have enough to negotiate a good deal for debt settlement with all of them.  Just remain patient.

Good Luck in your negotiations,

Janna Jones




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