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Whether we love to to admit it or not, debt is becoming as American as apple pie or hotdogs around the 4th of July. Actually, the average US household has $7,149 in credit card debt alone and an average total indebtedness of $15,587.

Are you a slave?

Has it gotten so unmanageable that you've be a slave to your debts? By this I mean do you experience feeling you're working mostly just to pay it off which all the fun has gone out in your life? If that's the case, you may be wishing you could discover debt relief.

credit card debt

How you can achieve debt settlement?

How could you achieve relief? There are some partial answers such as a consolidation loan, cccs or balance transfers. However, I think about these to be only partial answers because they do nothing at all to eliminate the money you owe short-term. A debt consolidation reduction loan usually takes you seven years to pay off, as the debt plan you would get through cccs would probably take five years to complete. Should you transfer the balances in your high interest charge cards to one with a lower interest rate, you can get some debt settlement however it might likely get you three to five years to repay the amount you owe on the new card.

Why debt settlement equals true debt relief

Another reason I say the debt settlement plans described above provide only partial relief is because none of them will do anything to actually reduce your debt. They are just ways of moving it in one group of creditors to a different, and having additional time to pay for them back. In contrast, a debt settlement program can bring true debt settlement because it would reduce your debt and help you become debt free in 24 to 48 months.

How debt settlement works

Without getting a lot of details, the way in which this works is that the debt settlement company contacts creditors and negotiates with them to reduce your rates of interest and balances, which would likely save you 1000s of dollars.

Once all of your creditors sign off around the settlements, you'd be given a repayment plan. Should you accept the plan, you would start sending your debt settlement company a cheque once a month rather than pay creditors. The cash you send the debt settlement company could be deposited into an FDIC-insured trust account and eventually accustomed to repay creditors.

Not for everybody

While debt settlement can bring debt settlement to a lot of people, it isn't for everybody. First, the only debts that the debt consolidation company can settle are unsecured debts and never those such as a mortgage or auto loan.

Second, you have to owe $7,500 or even more and also you shouldn't have made any payments on your debts not less than six months. Third, debt settlement have a negative effect on your credit rating. It's because those 6 months whenever you didn't make any payments in your debts. This was reported towards the credit agencies and can definitely ding your credit rating. However, it won't have as serious an effect just like you had filed for bankruptcy.

So the net/net is that debt settlement programs are a fact because of debt settlement. But before you leap into one of these programs, do your homework - ensure the company is ethical and reliable - and requires no upfront fees.