Debt settlement is a process by which you can get 40% – 60% of your debt wiped clean off. You can often become debt free in as little as one to three years. For many people, this sounds too good to be true. How is it possible to eliminate your debt to such a degree and how does this process work?
Debt Settlement From the Lender's Side
Why on earth would a lender choose to let 50% of your debt slide? Most lenders know that if you're filing for a debt settlement, chances are you're having a lot of financial difficulty and you're facing the possibility of not being able to pay off your credit. They know that in the event that you default or file for bankruptcy, their entire loan amount will disappear.
Debt settlement is a way for them to cut their losses and still get a certain percentage of their loan back. In other words, if they believe the risk of you defaulting is higher than the money they'll lose by going with a settlement, they'll cut your loan instead of taking that risk.
Debt Settlement From Your Side
From your point of view, debt settlement is often a great solution if you have more than $ 7,500 in unsecured debts. You can eliminate 40% – 60% of your debt. Your payment terms and interest terms can be negotiated. You can be debt free in just 12 – 36 months. In addition, you'll no longer be getting those pesky collection calls.
How it Works
Once you've decided to initiate the debt settlement process, you'll be given a representative. That representative will contact all your lenders and let them know that you're now in the settlement process. This will stop most of your lenders from contacting you anymore and instead contact your settlement company.
Your settlement company will then enter into negotiations with each of your lenders. Once they've reached a successful resolution, you'll be presented with your new terms.
It's that simple!