Debt Settlement
Debt Relief With You in Mind

A debt settlement or debt negotiation program is an approach that represents you, not your creditors. It is also an effective alternative to bankruptcy.

Debt settlement involves negotiating unsecured debt in which the debtor and creditor agree upon a reduced balance as payment in full. Consumers can use a debt settlement company or potentially arrange their own settlements.

Unlike debt consolidation or a credit counseling program, debt settlement company does not make monthly payments to your creditors. Instead, you save funds each month that are needed for the debt settlement company to negotiate your debt. You save funds either in an account at your bank of your choice or through a third party special purpose account. A special purpose account offers you greater protection from creditors.

Debt settlement is designed to work within your budget and settle debts in the shortest time possible. Once you have adequate funds available, negotiations with creditors begin. Funds are disbursed only after you agree to the settlements that have been reached.

Settlement companies offer clients various fee structures which may include a combination of an up front, monthly or flat fee, and percentage of the amount of the reduced balance. It is important to understand company's fee structure and all phases of the settlement process.

Through debt settlement, consumers are able to significantly lower the amount they owe and instead of taking many years to pay off the balance, they can often become debt free in as little as 18 to 36 months.

This option will affect your credit profile. Effects on your credit profile depend on your credit profile at the time of enrollment. Keep in mind the effects of debt settlement on your credit profile are much shorter than other debt relief options such as bankruptcy.