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Debt settlement is a process of providing your creditors with a one time lump sum payment to pay off the debt in total. If you are struggling to make ends meet, this could be one of the best options you have to pay down creditors once and for all. Debt settlement is often called debt negotiation or debt reduction. What can this process offer to you? When you work with a debt settlement company, you may see a much as a 50 percent decrease in the debt you owe to your creditors over the long term. Debt settlement is a good solution for many people. Here, a debt is negotiated by skilled professionals working on your behalf. They work with the creditors to determine the best way to pay off the debt quickly. For example, perhaps you have a credit card with a company you are behind on. You owe them $5000. Making minimum payments, it may take 20 years or more for you to pay off this debt and that will cost you dearly in the interest payments. Instead, you work with a settlement company. They direct you to make payments to them and they then negotiate with your lenders. Finally, the client agrees to accept a payment of $2800, for example, to pay off the debt in full. The remaining amount is no longer your responsibility to pay. Debt settlement does hurt your credit score, but before you begin to worry about that, consider the alternatives. Many of those considering a debt reduction program are on the verge of bankruptcy. Bankruptcy will place a black mark on your credit report that will remain there for the next ten years, limiting your ability to apply for loans and purchase property because of the huge drop in your credit score. While debt reduction programs do put a negative mark on your credit, it is a less drastic and harmful problem. And, in many situations, you are likely to see much less of a drop in your credit score than you would with bankruptcy. Even debt consolidation companies also cause this drop to happen. If you are struggling to pay your debts and you just need a fresh start, settling those debts may be the best option available to you. Many people are not sure if this is right for them. If this is where you currently stand, keep in mind a few of the options you have. While debt consolidation may be an option to consider, be aware of the fact that a debt consolidation loan is not the same as a debt consolidation program. The first is simply a loan where you are essentially borrowing from Peter to pay Paul and is going to get you nowhere out of your financial problem. On the other hand, a debt consolidation program works in a manner that is very similar to debt settlement, and in fact, both may be handled by the same financial company you would work with. Speak with a debt negotiator about your situation. Talk to them about the amount of debt you have, the type of debt you have and your ability to pay it off right now. If you are unable to pay off your debt in the next 12 to 36 months in full, it may be time to speak with a professional about these options. Debt settlement is an option, fully legal and acceptable, to getting your debt paid off fully. Not everyone will qualify, but for many, it is the best option possible under the current circumstances. Prior to making a decision, contact a settlement company to find out more about your options. For more insights and additional information about Debt Settlement as well as finding a variety of resources to gets tips on debt settlement options and companies, please visit our web site at http://www.mybloginfosource.com/debt-settlement
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