![]() ![]() ![]() Debt settlement prosĭebt settlement has a few advantages over other approaches to resolving your debts. Once you've settled with a creditor, be sure to check your credit report to make sure the balance is zero. It's helpful to include a conditional endorsement referencing the written agreement when you make the payment. If you and your creditors reach an agreement, you or your debt consultant will draw up a written agreement and send it to the creditor to sign.Īfter you have a signed agreement, you send the amount you agreed on to the creditor. Often, that contact takes the form of a debt settlement letter. Once you have enough money saved up, you or your debt consultant contacts your creditors and offers them a percentage of the total due as payment in full. You may be able to borrow it from friends and family, use your existing savings, sell some assets, or build up a balance over time in a debt settlement savings account instead of paying your unsecured creditors. The first step is saving up a lump sum to offer one or more of your creditors. What is debt settlement and how does it work?ĭebt settlement means convincing your unsecured creditors to accept less than your total balance as payment in full. Here's a closer look at how these plans work. There are also risks to entering a debt settlement plan, so make sure you understand the advantages and disadvantages of debt settlement. Debt settlement is one way you may be able to pay less than you currently owe without going through bankruptcy. If you're feeling overwhelmed by debt, there are a range of options available to help you get your debt under control. It's no secret that getting out of debt can be a lot harder than getting into it. ![]()
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