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By: Adriana Noton
Debt settlement is a tactic employed by individuals burdened by huge amounts of debts. It should be distinguished from debt consolidation since most people seem to confuse between the two. If you are the debtor, you are required to approach a debt settlement firm which specializes in the matter and explain the details of your predicament.

It works in a manner that the firm negotiates with the creditor to whom you owe money. You end up paying less than the actual amount owed. This acts as a relief considering the other option of going bankrupt. This is commonly employed for unsecured debts such as medical bills, credit card debts amongst others. Secured debts have property or assets attached to them. Defaulting the agreement leads to repossession of the asset.

Though a minority group of individuals claim that you can settle arrears with creditors by employing your own strategies, it can be very challenging. You may not have the knowledge of how the procedures for negotiation work. The benefit of hiring debt settlers is that they have had experience and expertise in handling such cases on behalf of clients.

The settler ought to be very reliable. To assess the reliability, it is important that you research to determine the success rate of the firm in previously handled cases. If the success rate if favorable, then you will have high hopes of benefiting from it. Fraudsters with intention to con you of your money are on the increase nowadays. Therefore carry out a thorough background check of the firm before making any payment.

The settler charges you for the service. He may demand a percentage of the total balance involved or an agreed amount. Considering that the plan may not succeed, you need to find the company that grants no win-no fee terms. They will not demand any payment if the case fails to be won.

The amount of discount gained in the process is considered as income under the tax authority laws. The difference between the actual amount and the amount you end up paying is calculated and taxed. The rate depends on the tax system in your country. Other than that, it is a huge relief getting to pay even up to 40 percent of the total balance which is considered as wholly paid.

Local directories contain information on debt settlement firm. Websites can also be used to find a firm which specializes in the sector. Ensure to do adequate research on every detail necessary to come up with a totally accredited firm. People seeking these services are an easy target for conmen. These criminals exist in large number especially in the internet. Establish a legit firm to deal with.

As clearly explained, debt settlement is much better than bankruptcy. It is scary to have your property seized in a case of bankruptcy resulting from inability to pay back debts. Seek advice from dependable sources for an informed decision. You will be left with a smile on your face at the success of the procedures.


We are a debt consulting organization whose business is helping those facing bankruptcy and debt problems.
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