The Benefits of Debt Settlement

What is Debt Settlement?

Debt settlement is the negotiation of a payment for less than the balance owed. It’s a relatively quick way to get rid of your unsecured personal debt accounts.

Debt settlement helps to quickly get rid of these debts by paying a specific balance that is a fraction of the amount that is owed. Many companies accept settlement offers because they would rather get some money and close out an account, than lose the entire balance in a bankruptcy proceeding.

Not all debts can be settled. The only types of debt that can be addressed through debt settlement are specific types of unsecured debts. That means debts that are not tied to a specific asset such as a house or car. Credit card debt is the most common type of debt addressed in settlement.

How You May Benefit from Debt Settlement

Here are just a few benefits of debt settlement:

Avoid Bankruptcy

One of the main benefits of debt settlement is that it gives people a reasonable option to avoid bankruptcy. While debt settlement stays on your credit record for 7 years, a bankruptcy filing will haunt you for life. It can affect future employment, as well as major purchases requiring financing, like cars and homes. Unlike bankruptcy, there is no public record that you settled debts with creditors after the 7 seven years has passed and it disappears from your credit report.

Relieve Debt Quickly

Another benefit of debt settlement is that it is one of the fastest ways to relieve your debt. While it can take years to pay off your debt through minimum payments, debt settlement programs usually only take 2 to 4 years.

Debt can be overwhelming. Having the option to settle your debt quickly will help you focus on other aspects of your life. It allows you to see a brighter future, rather than marred by debt and ongoing money problems.

Save Money

Saving money is another benefit of debt settlement. Many of our clients have settled for less than 50% of their original balance owed.

Instead of dragging out the repayment process, you can redirect these funds toward savings, college funds, or the down payment on a new home. Saving this money will also help you avoid falling into the same situation again.

You Are Debt Free

The goal of debt relief efforts, for most people, is to be debt free. It never feels good knowing that you owe someone money, especially when you know that it can hurt you in the long run.

During the debt settlement process, it is not recommended to take out a new line of credit, or to try and build your credit. Once your program has concluded and all debts have been settled, you can begin to focus on repairing your credit and getting back to your life.

Once you are debt free, take the proper precautions to ensure that you stay that way. Debt settlement gives you a fresh start. If you are looking for a debt settlement company that you can trust, contact us for a free consultation. We can discuss your options, and help you settle your unsecured debt.