There’s a lot to know about debt settlement before making a decision. Contact our debt specialists for a free consultation and we can help you make the best decision for your situation.
What is debt settlement?
Debt settlement, also known as “debt resolution,” “debt adjusting,” “debt negotiation,” “debt arbitration,” and “debt forgiveness,” is a way of getting out from under crushing unsecured debt. Unsecured debt includes credit cards, medical bills, and even cell phone debts — anything that is not secured by an asset, such as a car or house. As an alternative to bankruptcy, debt settlement can help clients get back on to road to financial security.
Debt settlement involves negotiating with the creditors to get them to forgive, settle, or take an offer for less than you owe. The creditor accepts a lower amount than what is owed in exchange for a lump sum payment. Instead of regular payments to the credit card company, the consumer begins to save for a lump sum payment to the creditor.
According to the American Fair Credit Council, debt settlement, on average, saves consumers $2.64 for every $1 in fees paid. When all is said and done, the average consumer sees savings of 30% on the original debt — and that’s after the debt settlement company gets their cut.
While there are some bad actors out there, the debt settlement industry is strictly regulated by the Federal Trade Commission.
Who should consider debt settlement?
Debt settlement is for people who are way behind on their payments and are getting hopeless about the cycle of late fees and escalating debt. Although not a requirement, debt settlement works best for people with at least $10,000 or more in unsecured debt. The more you owe, the more you can save.
It’s impossible to tell if debt settlement is right for you without knowing the details of your financial situation. For instance, how much debt you have, who your creditors are, and the number of creditors owed.
When will I see results?
On average, the negotiated settlement takes about 4-6 months. This gives you relief a lot faster than other debt relief options (AFCC). Depending on how much you owe, it takes about 12-24 months to save enough for a lump sum payment to the creditor.
Do I have to pay anything before agreeing to the terms of the settlement?
According to the FTC’s amended Telemarketing Sales Rule from 2010:
It’s illegal to charge upfront fees. Before a debt settlement company can charge any fees, they must first negotiate a settlement or otherwise resolve the consumer’s debts. The client can then review the terms and decide to accept or reject the offer. The client is not charged a dime in the meantime.
You have to disclose certain information before signing people up for your services. There is certain information that debt settlement companies are required to disclose, such as how long it will take to see results, how much it will cost, and any negative consequences that could result.
There is no obligation to accept the proposed settlement. Only if a client accepts the terms of the negotiated deal will they have to pay a fee for the debt settlement company’s services. This gives consumers the peace of mind to examine their options for dealing with mounting credit card debt.
Contact DebtBlue for Your Free Consultation
Don’t waste time wondering if debt settlement is right for you! DebtBlue has over 20 years of experience getting the best debt settlement deal for our clients.
To really know if debt settlement is right for you, get all your unsecured debt information together and give us a call. The more precise you can be on your debt situation, the better answers DebtBlue can provide.
Contact DebtBlue today for your free consultation: 1-855-332-8258