A debt settlement firm will work with your creditors to negotiate a lump sum payment to cover the amount you owe. An average creditor will settle for 45% of what you owe. However, it could be higher or lower depending on your circumstances. There will also be a charge by the company. Should you have any questions relating to in which and how to use settle debt, you are able to email us at our page.
A settlement company will normally require you to pay all your debts into an account they hold, which will be used to settle the lump-sum amount. This can be a great way to save money, but it is important to remember that any debt payments diverted into the settlement account will still be reported to credit bureaus as delinquent accounts.
This can negatively impact your credit score, especially if you have multiple delinquent accounts on your report. Any accounts that are not paid will remain on your credit reports for seven years from the date you defaulted on them.
During this time your creditors will continue harassing you to get you into making payments. Interest will continue to accrue, and late fees and other charges will be added. This will increase your balance, and make the entire process more difficult.
Make sure you select a respected company that has a proven track record of success. This will lower the likelihood that you won’t get a satisfactory settlement.
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