Debt Settlement
 
When you are looking at your debts quite often you will turn to a debt consolidation to pay down what you owe in a faster and more efficient period of time. By putting your bills into a debt consolidation loan you will get a slightly lower payment because of the set period of time that you are paying on it as well as the lower interest rate. But, what if you look into the debt consolidation loan and the new payments are lower, but not low enough? Do you turn to bankruptcy? No, as there is one other step you can try first.
 
There is something called debt settlement where you “settle” with your creditors for a lower amount of money that what you originally owed. The idea is that you can’t pay them back everything that you owe, but you want to pay them something – so they agree to take a certain amount of money for every dollar that you owe – like maybe $0.25 on the dollar – sometimes more, sometimes less. So you are able to pay back your debt in a much faster period of time and your creditors get something for their troubles.
 
If you have more than one creditor and owe more money from the settlement than you can just pay out, you might want to get your debt consolidation then. This debt consolidation is simply for the amount of money that you have settled for with all of your creditors. It is still a black mark on your credit – but it is no where as bad as if you had gotten a bankruptcy as that stays on your credit for seven to ten years.

 

 

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