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Settling your Debts with Debt Settlement

June 3, 2010 by · Leave a Comment 

Sometimes, debt has a way of snowballing. When it gets out of control, you will find that you have no way of settling what you owe to your creditors. Fortunately, there is a way in which this situation can be handled without filing for bankruptcy.


In a nutshell, Debt settlement is a process whereby a mediator negotiates on your behalf to reduce the amount owed. Debt settlement is handled by financial firms that specialize in this area. Depending on how good the firm is, the discount you will get from you debt can be substantial. The percentage can vary from 20 percent to around 75 percent; but keep in mind that the higher percentages are only possible through a combination of excellent negotiation skills and the perception your creditor has of you.

One fact that is to your advantage here is that all creditors’ view the amounts owed in a practical way. They have no real advantage in sending you to jail and getting no remuneration in the process. Instead, they prefer to get whatever they can from bad debts. In their eyes any money from a bad debt is good money. This is one reason why most financial firms get good results for their clients.

Most firms will give you a loan to pay off the altered amount in a lump sum. However, to get to this stage you need to have certain documentation cleared by them. You should also have a regular salary from which a fixed amount can be deducted towards the loan.

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