Debt SettlementWritten by Jill Morrison
Debt settlement is a comforting term to those saddled with massive credit card debt. The stress of dealing with interest charges, late fees, and collector harassment sends many consumers in search of debt relief. Settlement services are available online to offer support and counseling as well as workable solutions for credit problems which are widespread in this country. According to the Federal Reserve, unsecured consumer debt rose from $355 billion in 1980 to $1.65 trillion in 2001, and has increased since.
Qualifying for Debt Settlement
Settlement service is offered for all unsecured debt, such as credit cards, medical bills, personal loans, and department store cards. With an unsecured debt, there is no collateral or property attached to the loan that can be seized for repayment. Secured debts include home mortgages and automobile loans. If a consumer defaults on the loan, property is reclaimed as payment. Secured debts do not qualify for a settlement program.
Consumers with at least $2,500 in unsecured debt may qualify for a debt reduction plan. Other typical requirements are evidence of at least two unsecured debts and proof that there is a household income. Upon enrolling in a plan, most customers notice that collector harassment stops. All creditors are informed to direct correspondence to the settlement service. Negotiations are begun to reduce the amount owed to each creditor.
Online debt settlement companies are available with proven track records. They have developed relationships with creditors who trust their programs to operate honestly and fairly. Many customers receive reductions of up to 60 percent of their total debt. Negotiators may also work out a plan to get bad debts removed from credit bureau files. Monthly payment plans are established that work for all parties involved. Most customers can look forward to being debt free in a reasonable period of time.