Debt Settlement

What is debt settlement?

Debt Settlement is a process to settle your debts with the creditors. With debt settlement, a third party or you yourself negotiate with your creditors to come up with a reduced debt that you agree to pay. The reduction is usually between 30-60% of the total original debt amount.

Attributes of Debt Settlement:

Debt Settlement programs gives you a lot of options to clean your debts. It reduces your principal debt amount, eliminates your late fees, lowers your APR, and provides you the flexibility to repay your debts within your chosen time span.

Principal debt amount: Most debt settlement firms negotiate with your creditors and reduce the principal debt amount you owe. For example, in maximum cases 40-60% of the original debt amount is reduced.

Late fee charges: Some debt settlement firms waive off your entire late fee charges. It is sometimes seen that late fee charges club to form a major portion of your debt amount. Thus elimination of late fees can save hundred of dollars.

APR: Some debt settlement programs are done to reduce the high APR's for a particular account. For example, some debt settlement company may notify that APR has been reduced to 8% for the proposals accepted after 10th September 2004 and reduced to 0% for all proposals accepted before 10th September 2004.

Monthly installments: Debt settlement programs are also determined on the amount you pay on monthly installments. In this process you have to pay a single monthly amount to a debt settlement firm in order to settle your debts. The more you can pay the lesser period of time you take to settle your debt. The amount of your monthly installment is fixed by the debt settlement company based on your present financial status.

Annual time frame: Debt settlement is also chalked out on the basis of extended time periods. In such cases you have the provision to extend your time period from 2 years to 4 years or sometimes even longer. This is helpful for people who cannot afford to pay at one go.

How long does a debt settlement process take?

A normal credit card debt settlement case might take 3-9 months. If someone wanted to speed up the progress it could be shortened to 1-3 months. Someone wishing to stretch things out could find the time extended to 12-18 months. Some special debt management and debt reduction firms can even lengthen the process to 4 years or more.

How much do these firms usually charge?

Most debt settlement companies are transparent about their fee structure but you are advised to check out if there are any hidden fees involved in the settlement process. On an average the charge of debt reduction firms range from 8%-15% of the total outstanding debt.

The advantages of debt settlement:

Debt Settlement is one of the quickest and best ways to improve your Credit Report.

Avoid being harassed by the abusive creditors.

Many collection agencies will settle a debt between 40%-60% of the original debt amount. In this process you can save thousands of dollars. You will only have to make a single payment every month.

With debt settlement your time will be saved and your debts will be eliminated within 2 to 4 years. It is also less likely that you will have to fight the creditor later to actually delete the negative listing.

The disadvantages of debt settlement:

Your credit will be affected in a negative manner. This will be reflected on your credit report for the next 7-10 years. However, despite this fact consumers still opt for debt settlement and avoid bankruptcy.

There is a probability that creditors will continue to harass you throughout the process of negotiations and may even sue you or garnish your wage. However, only one creditor may garnish you at a time, and in some states, you may not be garnished at all. ¢ Some debt settlement companies will only accept you, if you have $10,000 or more in credit.

7 attorney tips for debt settlement:

Be honest but represent your financial position to be unfavorable.

If considering bankruptcy, say so. But do not incur any other debt after saying so.

Never disclose where you work or bank.

Don't hire a lawyer if you are not sure that you are in good standing when compared to your creditor.

If you are contacted more than one creditor for the same debt, be sure that your account is sold off to a second creditor. This indicates that you have avoided the first creditor really well.

If the creditor agrees to settle for full then make sure that your account status also shows "satisfied in full".

There are high chances that you may have income tax on the debt owed after settlement. The creditor might send you a 1099-C at the end of the financial year. You are then required to report the amount listed in the 1099-C as income.

Janet Williams is a contributing writer to http://www.debtconsolidationcare.com/ and is currently working on a special section in the site called do it yourself where you can eliminate your debts and become debt free.

You can get more resources from these pages:

http://www.debtconsolidationcare.com/ debt-solution.html
http://www.debtconsolidationcare.com/debt -free.html

---

Google News Updated : Thu, 16 Oct 2008 02:44:32 GMT Drinking and the Shrinking Brain - Washington Post Canada.com Drinking and the Shrinking Brain Washington Post - 15 hours ago Nobody wants to think about their brain's shrinking. But our brains do so as we age. They decrease in size by about 2 percent per decade; and the brains of drinkers may shrink more quickly, according to a study published Monday in the Archives of ... Alcohol shrinks your brain! ...True, sad story CollegeOTR Is Drinking Shrinking Your Brain? FOXNews ChattahBox - eFluxMedia - CNN - dBTechno all 165 news articles Publ.Date : Wed, 15 Oct 2008 11:02:40 GMT Movie Review - Entertainment Weekly Wall Street Journal Movie Review Entertainment Weekly - 4 hours ago DUBYA Josh Brolin stands out as the soon-to-be former president in Oliver Stone's W. By Lisa Schwarzbaum As his second term as the 43rd President of the United States concludes in national financial upheaval, the real George W. Bush is a figure more ... Video: George Bush on the Big Screen AssociatedPress Where's Dubya? The Star-Ledger - NJ.com The Week Magazine - San Jose Mercury News - Los Angeles Times - New York Times all 469 news articles Publ.Date : Wed, 15 Oct 2008 22:01:30 GMT New MacBooks Shine Light On Nvidia, Intel, SSDs - CRN DailyTech New MacBooks Shine Light On Nvidia, Intel, SSDs CRN - 2 hours ago Apple launched its new family of MacBooks to great fanfare at its Cupertino, Calif. headquarters Tuesday. After the initial flurry of speeds and feeds, here are some thoughts about the new lineup and what it means for the industry. Enterprise Mac | Tom Yager InfoWorld New Macbook lineup to feature GeForce 9400M GPUs Neoseeker PC World - IGN - Slashdot - PC Magazine all 1,228 news articles Publ.Date : Thu, 16 Oct 2008 00:07:24 GMT Hill's late jumper lifts Suns past Hawks, 102-100 - USA Today CBC.ca Hill's late jumper lifts Suns past Hawks, 102-100 USA Today - 33 minutes ago ATLANTA (AP) - Grant Hill made an 18-foot jump shot with 5.6 seconds left and the Phoenix Suns beat the Atlanta Hawks 102-100 in a preseason game Wednesday night. Nash leaves preseason game vs. Hawks Sports Network Suns superstar Nash leaves pre-season game with sprained ankle The Canadian Press HoopsWorld all 38 news articles Publ.Date : Thu, 16 Oct 2008 02:10:47 GMT Madonna, queen of reinvention, to divorce again - Reuters Reuters Madonna, queen of reinvention, to divorce again Reuters - 1 hour ago LONDON (Reuters) - The key to Madonna's enduring appeal has been to stay one step ahead of the game in the famously fickle world of pop. Video: AP Exclusive: Madonna, Guy Ritchie to Divorce AssociatedPress Madonna and husband Guy Ritchie announce plans to divorce Reality TV World E! Online - Financial Times - People Magazine - China Daily all 2,013 news articles Publ.Date : Thu, 16 Oct 2008 00:53:05 GMT US infant mortality ranks lower - San Jose Mercury News Chatter Shmatter US infant mortality ranks lower San Jose Mercury News - 2 hours ago By Mary Engel After a century of declines, the US infant mortality rate barely budged from 2000 to 2005, causing the United States to slip further behind other developed countries despite spending more on health care, according to a report released ... Infant Mortality: US Ranks 29th WebMD Infant Deaths Drop in US, but Rate Is Still High New York Times Washington Post - MedHeadlines - Bloomberg - MedPage Today all 37 news articles Publ.Date : Thu, 16 Oct 2008 00:11:36 GMT McCain brings up '60s radical in questioning Obama - The Associated Press ringsidereport.com McCain brings up '60s radical in questioning Obama The Associated Press - 30 minutes ago NEW YORK (AP) - Republican John McCain is raising rival Barack Obama's link to a 1960s radical in the final presidential debate. What We Want to Hear Washington Post Where is the room for John McCain to Succeed? CNN Political Ticker AsianWeek - Kansas City Star - Wall Street Journal Blogs - ringsidereport.com all 286 news articles Publ.Date : Thu, 16 Oct 2008 02:13:48 GMT Clickbank Data Feeds Legitimate Work From Home Jobs

PARLOT::Ebooks, Scripts, Websites, and more...

Adsense websites

Bankruptcy Your Best Bet?

Filing bankruptcy is a common practice among the U.S. Over... Read More

Debt Collectors; And what you can do to Get Them Out of your Life

FTC opinion letter on validation Section 809(a) of the FDCPA,... Read More

The Last Debt Solution Should Be Bankruptcy

A debt solution like bankruptcy should really only be used... Read More

Debt

We all know about debt. If you don't have too... Read More

How to Get Triple A Credit in 25 Days

Good credit is everyone's dream. A wise use of credit... Read More

Help for the Single Mother with Managing Credit and Debt

Today's consumers benefit drastically from the usefulness of credit. Credit... Read More

Bankruptcy - The Easy Option?

Incredibly, since the changes in the bankruptcy law in April... Read More

Free Quick and Easy Money Saving Tips ? Part 1

With the high cost of gasoline and the amount of... Read More

Eliminate Your Credit Card Debt, But How?

Can a debt consolidation loan eliminate your credit card debt?... Read More

What Are The Benefits and Consequences Of Getting Rid Of Debt The Easy Way

We have all experienced getting so far in debt we... Read More

The Credit Card Debt Termination Scam

"Legally terminate credit card debt! You can be debt-free in... Read More

Mandatory Credit Counseling for Those Considering Bankruptcy

Most Americans are aware of the sweeping changes in U.S.... Read More

Life on a Debt Management Program

Signing up for a debt management program is easy; it's... Read More

Credit Card Debt Freedom is Possible

Credit card debt have you drowning financially? You're not alone.... Read More

Credit Card Debt Elimination

Credit card debt elimination can be done with a good... Read More

Fast Track Out of Debt

You go to the mail box and scan - a... Read More

A History of Money and Banking Secrets That Banks Dont Want Published

A History of Money and TradeTo start with a history... Read More

Bankruptcy As An Option

If your financial worries are preventing you from sleeping at... Read More

Why You Should Get Out of Debt Today?

The main reason for getting out of debt today, is... Read More

Student Loans Can?t Be Swept Away Through Bankruptcy

Bankruptcy is in the news these days, as Congress has... Read More

Bankruptcy Reform

There are some new bankruptcy laws going into effect before... Read More

Creating A Realistic Budget

Budgeting -- ooh, what a scary word! If you want... Read More

Debt Getting You Down? - Make a List!

Debt is not much fun and when faced with it,... Read More

Is My Credit Card Debt A Problem?

For most Americans, credit card debt is a dangerous and... Read More

Dont Let The Good Times Bury You

It is vital to get rid of debt while things... Read More