Debt settlement is a debt relief option available to consumers in America. A debt settlement program is a very powerful and aggressive form of debt relief meant to relieve debtors within three years. There are many companies ready to help consumers negotiate with their creditors. Here’s a step-by-step explanation of how these programs work:
- The client enrolls their debts into the program.
- The company opens a trust savings account in the client’s name.
- The client makes one monthly payment for all of the debts combined into the savings account.
- The company’s arbitrators negotiate with the creditors when there is enough money saved.
- After one card is paid off, the cycle repeats until the program period has passed – the client continues making payments into the savings account and the arbitrators negotiate when funds are available.
Once your debts are paid down, make sure you stay current on your secured loans like mortgage payments and auto loans because they’ll help improve your credit score tremendously and within a year or two your credit score will be in the 700s allowing you to apply for loans and lines of credit while keeping the interest rates low and somewhat reasonable.
Debt settlement is one of the most powerful tools available for consumers today. It’s the most aggressive approach to relieving debt and should be used for relieving legitimate financial and medical hardships. Always remember, before putting your trust with any company, make sure they have a high rating with the Better Business Bureau and an impeccable proven track record.