Debt settlement is a solution for individuals who want to manage multiple types of debt with a single monthly payment. A debt settlement company (sometimes called a debt relief company) will negotiate your debts to help you get better monthly payments and interest rates. They may even be able to negotiate down some of your current debt balances. Then, you’ll pay your debt relief company a single payment that will go toward all your debts.
Debt relief providers will typically charge a fee for services. Avoid predatory companies that make lofty promises, and instead work with legitimate agencies who aren’t a scam.
Living with debt can be very stressful. There are services that can help you manage and consolidate your debt. Once you know your credit score and have a comprehensive overview of your debt, you’re ready to start tackling your debt.
While becoming debt-free is probably your main goal, it may be best to start smaller, depending on your situation. Focus on making consistent payments and following your plan. Debt relief experts — whether they’re certified credit counselors or debt settlement companies — can help you get started.
Debt settlement programs help set up debt repayment plans and may negotiate with creditors on your behalf. Once you’ve settled on a plan, you’ll have to make regular payments to the debt settlement company to pay off your remaining debt.
Debt relief programs don’t automatically eliminate your debt, but instead set up a more manageable repayment schedule, in many cases. Your entire debt won’t be forgiven and you’ll still have to make payments, but you may be able to reduce your overall debt burden.
Debt relief services aren’t free, and you’ll have to pay a fee that’s often calculated as a percentage of the debt burden you’re paying off. Credit counseling services, which are similar, often come at a cost as well.