Debt settlement, also known as debt negotiation, is a means of debt relief in which the consumer and creditor agree on a reduced balance that will be regarded as payment in full. Debt settlement is only possible for unsecured debts such as credit cards and medical bills where the creditor is unable to seize or lien assets of the consumer to satisfy the debt. Unsecured creditors offer settlements of debts for less than the amount owed if they believe the consumer is unable to repay the full balance and the settlement will avoid greater costs or losses, e.g. if the consumer files bankruptcy.
Debt settlement is an alternative to bankruptcy for consumers who are unable to pay their contracted minimum monthly payments or afford debt management plan payments through a credit counseling agency. Consumers opting for debt settlement avoid the stigma and intrusive court-mandated controls of bankruptcy while still lowering their debt balances. At the same time, their creditors recover a portion of their loans and avoid the risk of the consumer filing bankruptcy where they could lose the entire amount owed.
Debt settlement plans are offered by licensed companies and attorneys to provide consumers a structured program to payoff their unsecured debts in a specified period of time. If you think a debt settlement plan may be a good solution for you and would like more information, complete the online application below and a certified counselor will contact you.