Bad debt settlement, also known as debt negotiation or debt arbitration, is an approach to debt reduction in which the creditor and the debtor agree on a reduced balance that is viewed as the full payment of an outstanding debt.
More importantly, debt settlement is a debt relief option that can prevent vulnerable borrowers from filing for bankruptcy.
Done correctly, discharged debt can provide final closure to your debt problems while avoiding extensive lawsuits, liabilities, or liens, and most importantly, eliminating the need to consider filing for bankruptcy.
Also, for consumers who are mired in unsecured debt, perhaps desperate for help with credit card debt, struggling to meet their monthly payments, who are looking for a viable alternative to bankruptcy, the liquidation of debt is a perfectly legal solution.
Debt settlement plans also make sense from a creditor’s perspective. If a consumer experiences financial difficulties and files for bankruptcy, the creditor will receive nothing. If the debt is paid off, a mutually acceptable solution is reached through a negotiation process. It is a true win-win situation for both parties. Very often, particularly in the case of credit card companies, the creditor will not lose money due to the liquidation, he will only make less profit. Obviously, this is preferable to receiving nothing if the debtor files for bankruptcy.
It may not be possible to get out of the process with your credit rating completely unscathed, but debt settlement will be much kinder to your credit rating than bankruptcy or any ongoing debt problems.
There are specialized debt settlement companies that are dedicated to providing debt relief, help, and advice to people just like you.
These debt settlement companies employ dedicated professionals who will work on your behalf, taking full advantage of the leverage they have in this situation to achieve substantial reductions in debtors’ unsecured loans.