Consumers today are facing a hardship that has been caused by not only the economic climate of losing their jobs or reduced hours to part-time but also by a medical expenses. This means maybe only making the monthly minimum payments on their credit cards.
So during these trying economic times, the consumer is not only stressed out because of their job lost but their inability to meet their obligations. The consumer must decide what is best for them and their family. Because of the emotional toll it is taking on them.
As what is debt settlement? Debt settlement is a managed approach used by a third party company. This company will negotiate on behalf of the consumer to reduce their debt by up to 50% of the outstanding current balance. Basically, the consumer places a set amount of money each month into a “trust account” until approximately half of what is owe on their lowest credit card balance. It is when the debt settlement company will start to negotiate with the lenders. The lenders are more willing to take something on the balances than have the consumer file bankruptcy on them. In a bankruptcy case, depending on the assets of the consumer, normally secured lenders get repaid first then the unsecured lenders. In most cases, the unsecured lenders receive no money from the consumer.
The consumer wants to do the right thing not only for themselves but their families. A debt settlement program can take from 12 months to 48 months to complete based upon the outstanding credit card balances. This program may cost the consumer less than their current monthly minimum payments. It is not a quick fix program but a program that will allow the consumer the ability to repay their debt and repair their credit score.
