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Know About the Process of Debt Settlement

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by: No more debt !
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Date: Sun, 7 Dec 2014 Time: 8:21 PM

Debt settlement also referred as credit settlement or debt negotiation is a process of debt reduction, where in the debtor as well as the creditor agrees to reduce or forgive some percentage of the total account balance. In this process, negotiation is done between the creditor and the debtor and both parties agree on a reduced credit balance. Debts which are unsecured like credit card debts and medical bills can easily be settled through this process. When in such a situation, people can take help of a legal advisor or an arbiter who will tell them the ways to deal and negotiate with the creditors.

Debt settlement

One should know whether going for a debt settlement plan is the best and right option for them or not. There are a number of determinants that can tell whether going for settlement will be an appropriate solution for them. One such determinant is whether the total outstanding debt owed by an individual is below $10,000 or not. Another factor is whether one has less than 10 creditors to whom he has to give money. Income of an individual is also checked, if it is too high to meet the requirements of Chapter 7 bankruptcy plan. The short as well as long term financial plans of an individual are also taken into consideration, for example if they are planning to buy property or a vehicle in the future. Whether an individual has advanced cash saving with which he can give a settlement payment in a lump sum amount is also a determinant.

There are some factors that can ensure whether the process of debt settlement will be successful. They include are:

  •  The income and ability of an individual to deliver payments on time according to the plan.
  • An individual's source of income, whether he is employed full time, part time, self employed, doing a contractual job or retired. It is advised that the people going for this plan should have a long term source of income, so that they can complete all their payments on time.
  • The duration of the debt also plays an important role in achieving a successful settlement.

Debt management attorney

To manage such situations, the debtors should consult the best debt management attorney that are experienced and have all knowledge related to Chapter 13 debt consolidation plan. One can schedule a meeting with them or even arrange for a free consultation if required.

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Here the author is telling about the process of debt settlement and the ways in which one can deal with it.

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