Months and years of debts can be very stressful, but debt settlement can ultimately be the stress reliever for many people in debt.
Regaining control over out-of-control finances is an incredibly difficult process.
However, many turn to settlements for their unsecured debts to finally get out of the financial hole that they have been in.
An agreement between debtor and creditor in which the debtor pays an amount that is less than what is owed is a debt settlement.
After the reduced balance is paid, the debtor is free of the debt.
Credit cards, department store cards, medical bills and loans are all considered unsecured debts and are eligible to be settled.
Creditors risk losing money with unsecured debts and would rather settle for less than not receive any payment.
Cars and homes are secured debts and cannot be settled.
Creditors can simply repossess the property if payment is not made.
A professional company can negotiate settlements for people in debt for a fee.
They do require, however, for debtors to either have some money saved or to save some money in a predetermined period of time in order to begin the negotiation process.
That money is used as a lump sum payment to negotiate with.
Those who choose not to work with a professional company can still negotiate a settlement.
They benefit more from direction communication with the creditor rather than with the collection agency.
Some research and persistence on the behalf of the debtor can help ensure a fair deal.
Not only should debtors negotiate their debts, but should also negotiate their credit scores.
The report of delinquent payments is already a negative mark on the credit report, however it can be removed by the creditor.
If the debtor and creditor can come to an agreement, then the negative marks can be removed after the debt is settled.
Having the entire agreement in writing is most important.