How Debt Settlement Works

In its most simplistic form, debt settlement is designed to help you reduce your debt by negotiating with your creditors to eliminate about half of what is owed.

Debt settlement is not consumer credit counseling. It is not intended for those consumers who do not know how to manage their money or pay their bills on time. It is simply a means of reducing or eliminating unsecured debt, an alternative to bankruptcy or other complications. It is considered to be the first step in seeking debt relief, because if you can avoid a 3rd party assisted option, you will get yourself back on your feet much more quickly and without a long term affect on your credit profile.

Because of this, the following things must happen…..and this is true of many debt settlement programs.

You must be delinquent on the accounts before your creditors will consider and recognize your hardship and negotiate your balances.

There’s no viable way around it. On a positive note, by eliminating the debt, you will be able to turn around your debt to income ratio and help restore your purchasing power.

Your creditors will not negotiate the balance until you have enough money to do so.

This is a business transaction for them. Cash flow is important and they will typically require settlement payment within 24-36 hours.

Occasionally, a large balance will be negotiated over 3-4 payments, and in that case, the negotiation is started sooner. This is not typical, but there is a possibility is can happen.

Save, save, save...

Typically, most settlements are estimated around 40% of what you owe, so you need to save that much BEFORE anyone can really start working on the balance. That’s why you’re put on a monthly savings plan.

This doesn’t mean that your creditors won’t know you are in the program; they will all be notified of your hardship and your intent to settle your balances just as soon as you start the program.

Often your settlement percentages may be lower than 40% of the balance owed, in which case any additional funds left in your settlement account will simply be saved for the next settlement.

It is not uncommon to complete your program earlier than expected because of our strong relationship with the creditors.

Balances will be settled one at a time.

We begin with the smallest balance first, making sure that you gain confidence in the program by seeing the results right away.

Any reputable debt settlement companies will take the time to make sure that the program is suitable for your situation.

Flexibility is an important factor, due to the nature of “life”.

Communication is the key. We will make sure to work with you to complete the program, even if you should experience any additional hardship.

Your original creditor always has the legal right to contact you.

There’s no way around this. Some creditors will ignore the limited power of attorney that is sent to them and will keep contacting you throughout the program. Some will respect that request to cease communications with you and will start communicating directly with your negotiator. Regardless, it is not your job to speak to them. It’s your job to communicate with your negotiator or customer service representative that you’re being contacted and by whom.

If and when the account has been charged off and sent to third party for collection, those calls will be easier to handle.

Once a settlement has been reached with your creditor, you must approve it.

You will be notified of any settlement 50% or less. Of course, recommendations will be made, based on what is known about your account and your individual creditor. You have veto power at all times.

If you approve a settlement, an agreement will be obtained, in writing, from your creditor, detailing the agreement and how the transaction should be made. Once that transaction has been completed, a settlement in full (SIF) letter will be obtained, in order to document and confirm that you have settled and closed this account at zero balance and that the remaining balance has been forgiven.

Learn to live a debt free life.

Many of our customers have learned how to save throughout the duration of their settlement program.

Many choose to apply this habit, allowing them to save aggressively for themselves and to build a very healthy financial cushion.

If You Need Debt Settlement To Keep More Money In Your Pocket...

...Then We'll Eliminate More Stressfull Bills and Annoying Debt Faster Than Any Other Company... I Guarantee!

How Debt Settlement Works