What is Debt Settlement

What is Debt Settlement or Debt Arbitration:

Debt Settlement - or Debt Arbitration - is when your creditors agree to accept payment for less than the full balance due and the debt is considered satisfied. It is an honest, responsible and ethical debt relief alternative to help those with a real need who would rather work things out with their creditors than declare bankruptcy. Debt settlement can substantially reduce the amount you owe such unsecured debts as credit cards, personal loans, lines of credit, overdrafts, etc.

If creditors understand that a client has a legitimate financial hardship which prevents them from meeting his or her financial obligation, they are often willing to accept a part payment, rather than the full amount owed, to satisfy the debt. The result is a mutually agreeable settlement negotiated between debtor and creditor, conducted with discretion and respect and in a businesslike manner through the services of a Debt Arbitrator.

People turn to debt negotiation for different reasons. Individuals, families or companies struggling with debt often find themselves facing intense pressure from collection agencies, harsh collection techniques, calls at home or work, and threats of legal action. They may have suffered a financial setback, are living paycheque to paycheque, are steadily sinking further into debt and are having difficulty in making the minimum payments and may even have fallen behind. There may be contributing circumstances such as unemployment, marital difficulties, medical problems, dependency issues like alcohol or gambling.
Many have difficulty dealing with creditors and collection agencies. There seems to be no acceptable solution which will satisfy the collectors other than “Pay Now!” Bankruptcy is now being considered as an option.

Debt settlement is best viewed as an alternative to bankruptcy, permitting you to maintain control over the process of resolving your financial difficulties.
It is accomplished by negotiating with your creditors. Once the negotiation concludes and the creditor provides a settlement letter, the settlement amount is expected to be paid right away, usually no more than 15 days from the date of the offer. For this reason, you must have the funds before receiving the settlement letter. Obtaining the funds is accomplished either by you having the money available at the start of negotiations or you need to save for the settlement. The better settlements occur, of course, when cash is available to immediately settle the debt.

Debt arbitration is NOT a free ride for those who simply don’t want to pay their bills or think they can beat the system.