American Debt SettlementWritten by Jill Morrison
American debt settlement is a service available to those with credit card and other unsecured debt. Secured debts such as mortgages and automobile loans do not qualify. Debt settlement companies negotiate with creditors to reduce the total owed by a substantial amount. Americans have a growing need for debt management programs. More than 1.5 million bankruptcies were filed in 2001, and that number has not gone down significantly since.
Benefits of Debt Settlement
Many settlement services offer consumer credit counseling free of charge. This enables them to be classified as non profit organizations. Creditors who reduce debts through a non profit service can claim the losses as tax write offs. They will often reduce the original debt as well as waive interest charges and late fees. They plan for losses due to bad debt and recognize that reduced settlements are beneficial to both parties.
Debt settlement services may be located online in the privacy of your own home. Many have the expertise to help consumers get out of debt for a fraction of the amount they owe. Some of the services offered are credit counseling, debt management programs, consolidation programs, and debt reduction negotiation. Consumers can get a debt analysis and recommended course of action with no further obligation.
Credit card use by Americans is increasing with many consumers willing to carry large balances. About one out of four cardholders regularly makes the minimum payment. Therefore, the average American family pays $1,100 per year in interest charges. Consumers with overwhelming credit card debt can investigate settlement services before considering bankruptcy. With help from trained professionals, most people can take control of their finances and remain debt free for life.