What Is Debt Settlement and How Does it Work?
Debt settlement is when your debt is settled for less than what you currently owe. Also known as debt relief, debt settlement is usually handled by a third party company.
Here’s how the process works with our help:
- We help you come up with a lump sum to offer one or more of your creditors. That means you can either borrow it, take it out of savings, sell some assets, or put money into a debt settlement savings account where the funds accumulate.
- We will contact your creditors and offer them a percentage of the total due.
- When we reach an agreement, a settlement letter is provided by the creditor.
- Only after the settlement letter is received, we will send payments to the creditor.
Once the account is cleared, we will check your credit report to make sure the balance is zero.
Debt Settlement Cons
Harassment – Your creditors will probably become very concerned if you begin missing payments to save a lump sum. They will probably contact you through the mail, online, by text, or phone. We recommend not communicating with your creditors, and let us do the communicating for you.
No guarantee – The creditor may deny your request for settlement if they have reason to believe that you can afford to pay your entire balance. As a reputable debt settlement provider we will not guarantee to settle your debts or make any similar claims if we see that you are indeed able to pay back your debt in full amount. Here at CuraDebt, you can expect honesty. We will review your finances with you and find the best resolution according to your finances.
Fees – Professional debt settlement companies typically charge between 18% and 25% of the enrolled debt.
Debt Settlement Pros
Privacy protection –Compared to bankruptcy, debt settlement is a better option because it takes place outside of the court system. Bankruptcy creates a public record that is available to anyone. If bankruptcy will embarrass you or harm you professionally, debt settlement is a better option.
Don’t have to answer “yes” to the questions of have you ever filed bankruptcy – Creditors, employers, lenders or others can ask if you have ever filed bankruptcy and you would have to answer yes. This is avoided by using debt settlement to resolve your accounts.
Control – If you file bankruptcy, you get no say in the outcome. In contrast, with debt settlement you don’t owe fees unless we settle with your creditor.
Higher success rate – According to the Federal Trade Commission, debt settlement completion rates average 45% to 50%. That’s significantly higher than the success rate for credit counseling at 21% and Chapter 13 bankruptcy at 33%.
Affordability – The Federal Trade Commission states that debt settlement is more affordable than a debt management plan from a credit counseling company. That’s because debt settlement allows you to eliminate debt by paying less than you owe.
Debt settlement can be a good solution for people with more debt than they can afford.
We settle unsecured debts such as credit cards, medical bills, and personal loans. Call us today for your free consultation. 1 -877-850-3328