What Is A Debt Settlement?

Debt settlement is when a firm negotiates a settlement with one or more creditors. The settlement amount varies but most often it is about 30 to 50% off the original balance. So if you owe $10,000, a debt settlement firm may be able to workout a deal so that you only have to pay $5,000 to $7,000. So instead of filing for bankruptcy, you can pay off your credit card debt, medical bills and other unsecured debt with a debt settlement.

Sometimes, good people fall into bad debt situations. They want to meet their financial obligations, but their credit card debt is overwhelming and they don’t see an end to the road. Is bankruptcy the answer?

Not necessarily. Debt settlement can be an alternative to bankruptcy!

CreditGUARD of America is a non-profit credit counseling agency offering a variety of financial solutions for getting out of debt. Obviously your creditors want you to pay what you owe; however, in the event that they’re faced with getting part of their money or nothing, you can get them to agree to a debt settlement.

Contact us online or call CreditGUARD of America, Inc. at 1-800-500-6489 to find out if a debt settlement can help you get out of debt!

Creditors are only going to agree to a debt settlement if they feel it’s in their best interests. You will have to prove that debt settlement is the only way they’re going to get their money. Here’s what creditors look at when considering a debt settlement:

Payment History – Your credit report shows the inability to meet your financial obligations across the board. Being late on 1 or 2 credit card payments doesn’t mean that you’re eligible for a debt settlement.
No Assets – Creditors can sue you to obtain their money; however, if you have no assets, like a car or home it may not be worth the time and money to take you to court.
Financial Hardship – Sometimes creditors will consider a debt settlement if you’ve had some type of financial hardship that prevents you from paying your unsecured debt.

Debt settlements will show on your credit report as “Settled”, and does negatively affect your credit score because you did not pay your full balance. But “Settled” is better than “Charge-off” or “Bankruptcy”, because you did pay something back to the creditor. In some cases, debt settlement may raise your credit score if you already have existing bad credit.

If you at all have the ability to pay off your credit cards, medical bills and other unsecured debt then you should consider other credit solutions like a debt management program.

While you can try to do a debt settlement by yourself, there are a number of advantages to using a debt settlement firm. Creditors tend to be more responsive to a debt settlement firm than an individual. A debt settlement firm is familiar with the various guidelines each individual creditor has, and knows at what percentages these creditors will settle, based on other debt settlement cases. Some of the paperwork involved with debt settlement is very confusing, so it helps to have someone with your interests in mind.

Beware of debt settlement firms that promise, “Eliminate Your Debt Today!” or “Get Out of Debt Fast!” Debt settlements typically take 3 to 9 months. During this time, you should be saving your money to pay off your debts. When a debt settlement is accepted by your creditors, you will be expected to pay your debt settlement plus the firm’s fees. That commonly equals 8% to 15% of the original total outstanding debt.

Don’t let anyone pressure you into joining a debt settlement program. Companies that practice high pressure debt solutions, may not have your best interests in mind and create more debt problems. Many consumers have been tricked into joining debt elimination programs that require large upfront fees, only to find out later that their payment never got to their creditors.

CreditGUARD of America will refer you to reputable debt settlement firms in good standing with the Better Business Bureau. Our certified credit counselors will review your financial situation to make sure that debt settlement is the best credit solution for you.

So before hiring a debt settlement firm, Contact us online or call CreditGUARD of America at 1-800-500-6489. Certified credit counselors are available Monday through Thursday 8:00 a.m. to 12:00 midnight; Friday 8:00 a.m. to 11:30 p.m.; Saturday 10:00 a.m. to 6:00 p.m. Eastern Time. For online service, 24/7, use the Credit Card Debt Analyzer to calculate your estimated interest and payment savings available, through our debt management program.

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CreditGUARD of America • 5300 Broken Sound Blvd NW • Suite 100 • Boca Raton, Florida 33487
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