What is Debt Settlement?

Debt settlement is the process of negotiating with your creditors so that you are able to pay off a certain percentage of the debt amount that you owe. A debt settlement company will use different types of strategies to negotiate with your creditors so that you get the best outcome. You'll want to hire a debt settlement company that has arbitrators who are experienced and licensed so that they can negotiate a deal for you with your creditors. You can expect to lower the balances on the debt that you owe by anywhere from 40% to 60%.

But how does the debt settlement process work? And why are creditors willing to negotiate with you so that your debt balance is reduced? The answer is simple: creditors know that if you end up declaring bankruptcy that they may not have any chance at all of seeing any of the debt that you owe repaid to them. Studies show that approximately 25% to 30% of all bankruptcies that are filed each year are "current debt". Many people obtain more credit to pay off another creditor. After a period of time these people run out of credit to pay off their existing debt. And this is when many bankruptcies are filed.

When people file a bankruptcy claim creditors don't get back any of the money that is owed to them. This means that a creditor is better off negotiating with the person who owes them money so that they can regain even a small portion of the total amount of the debt. Debt settlement companies will work with you and your creditors so that you can pay the minimum amount of money back to your creditor.

A debt settlement company will allow a certain amount of time for the debt to be settled. A common time period is 36 months and during this time the creditor needs to agree to on a total amount to negotiate on. Before you can use debt settlement to settle up your debts, you'll need to qualify for the program. In order to see if you qualify or not, many debt settlement companies will require that you talk to a consultant about your personal debt. Together you'll set up a financial program that will meet your needs. You'll be able to determine just how much money you need to put aside every month so that you can start to pay off your debt.

Many times a debt settlement company will contact your creditors to let them know that they will now be your representative for the debt that you owe. This way you avoid the hassle of having your creditors continue to call you looking for payments. If you find yourself deep in debt you may want to consider debt settlement as a solution.

http://www.debtsettlements.net

Jon Thomas has been involved in finance and insurance, specializing in emerging growth markets since 1979. He continues to write articles concerning the public and their pressing financial concerns. http://www.debtsettlements.net

---

Personal Bankruptcy: Last Option To Legally Stop Bill Collectors

Do you have stacks of unpaid bills?Are you in debt?Are... Read More

Debt Reduction, a Necessary Endeavour

Massive debt is something many Americans face. Debt reduction is... Read More

The Debt Free Lifestyle

Many people have been taught that you cannot get ahead... Read More

How To Get Out Of Debt

If you have found yourself in a position where you... Read More

Dealing with Thingitis

Debt is quickly becoming an epidemic in America. However, through... Read More

Home Equity ? Foreclosure Often Not Necessary in Current Market

While driving around your community, you may have seen signs... Read More

Credit Repair? Its All Up to You

Log onto to a search engine such as google.com and... Read More

Debt Relief -- Why Most Programs Have A 75% Failure Rate

Debt consolidation, equity loans, credit counseling, debt management plans, even... Read More

Credit Card Debt Freedom is Possible

Credit card debt have you drowning financially? You're not alone.... Read More

Bankruptcy Your Best Bet?

Filing bankruptcy is a common practice among the U.S. Over... Read More

Life After Bankruptcy

Bankruptcy and Credit - What Happens After Your Debts Are... Read More

Credit Counseling ? Signs That You May Need Help

Credit counseling is a viable option for those who are... Read More

Debt: Dont Pay Your Minimum Balance

Almost all Americans carry credit card debt. Actually, over 40%... Read More

Establish Money Saving Goals For Added Success

Having something tangible to strive towards can work wonders for... Read More

5 Options Toward Debt Relief

If you are in debt, well over your head in... Read More

Debt and Your Dreams

You may not realize what that credit card bill is... Read More

Debt Problems? You Can Negotiate With Your Creditors

It is always possible to negotiate with creditors ? even... Read More

Bankruptcy: What You Need to Know

Personal bankruptcy is a legal way to give people with... Read More

Senate Passes New Bankruptcy Law

The United States Senate passed a law on March 10,... Read More

Bad Credit Home Loan To Get You Out Of Debt

A "bad credit home loan" can help you climb your... Read More

New Bankruptcy Legislation May Make it Harder to Find an Attorney

The recently passed Bankruptcy Abuse prevention and Consumer Protection Act... Read More

New Bankruptcy Law ? Targeting the Wrong People?

Last April, President Bush enthusiastically signed into law the oddly-named... Read More

The Five Most Popular Questions About Bankruptcy

WILL MY CREDITORS STOP HARASSING ME?Yes, they will! By law,... Read More

IVA: Individual Voluntary Arrangement

What Is an IVAThe IVA (Individual Voluntary Arrangement) was introduced... Read More

Learn The Five Key Debt Reduction Steps You Must Take Immediately!

Step 1. The purpose of this first step is to... Read More

Debt Handling Solutions

Sometimes debt can seem overwhelming. In those instances, or even... Read More

Bankruptcy - Is It The Right Choice For You?

Bankruptcy is one of the tougher choices we as adults... Read More

Worried About Debts?

Having trouble paying your bills? Getting dunning notices from creditors?... Read More

Questions to Ask a Credit Counseling Service about Debt Relief

Debt relief is a topic on a lot of consumers'... Read More

Take Careful Consideration Before Filing Bankruptcy

Filing bankruptcy is not fun! It is a last resort... Read More

Bankruptcy ? Bankruptcy Myths

Bankruptcy has long been a big question mark in the... Read More

Dont Drown Your Debts, Manage Them!

Are you among the millions of people who have found... Read More

Bankruptcy Reform: Designed to Protect Big Business

Who will benefit from the new bankruptcy reform laws? The... Read More