Does Debt Settlement Really Work?

When looking for a way out of debt many look for debt settlement services as a method to pay back some of what they owe.

In the past creditors would almost never settle debts unless the debtor declared bankruptcy, however times have changed and with so many people being behind on their payments, creditors feel getting some money back is better than nothing and there is now much more help out there.

When people find they are struggling to repay their debt and are behind on their payments they may now turn to debt settlement as a means of getting them out of their situation. Debt settlement is the process of negotiating with creditors in order to pay less than you actually owe to discharge the debt. Websites such as http://thedebtreliefsreviews.com can provide more information on debt settlement.

There are many companies out there offering debt settlement, however it is also something that some people can do for themselves, through being persistent and working with creditors directly. Debt settlement companies can charge up to 10-15% of what you owe in fees and cannot guarantee results, so if you are able to do it yourself this can save a lot of money.

If you decide to allow a debt settlement company to work on your behalf there are a few points you need to consider which will increase the chances of you successfully becoming debt free:

• The amount you can save – the company should be able to save you around 40% of your debt. If a company claims to be able to save you 60-70% of your debt you should be wary.
• Realistic payback plan– make sure you are paying back money in a realistic time frame. The main benefit of debt settlement is to become debt free is a fairly short period of time so you should look for a debt settlement company who aims to have you debt free within a few years.
• Collection calls– make sure the company will ensure that calls from collection agencies are stopped.
• Reputability– A good place to start when looking for a debt settlement company is to check the Better Business Bureau. Look for companies who have been in business for longer than 10 years if possible as these will have settled many debts and will know what they’re doing.

If done correctly and by a good organisation debt settlement can work very well in freeing you from your debt, but be sure to air on the side of caution when looking for a company as choosing the wrong one can land you in more hot water.   

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