Debt Settlement Essay

1535 Words 7 Pages
The average American household has over $15,000 of credit card debt. Many of these families are struggling to make the minimum monthly payments, and some are using plastic to cover daily living expenses such as groceries, transportation costs, and medical co-pays. Despite improving economic conditions, more and more credit card users are receiving phone calls and letters from creditors that their payments are past due.

If you have too much debt and stress, now is the time to stop this destructive cycle and get the help you need from a debt reduction program. This article teaches you the principles of debt settlement, one of the most popular forms of debt relief.

What is debt settlement?

Debt settlement--also known as debt arbitration, debt
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For example, many loan, credit card, and job applications ask if you have ever filed for bankruptcy protection.

Bankruptcy cannot eliminate alimony and child support obligations as well as criminal fines.

Except in very limited circumstances, bankruptcy cannot wipe out student loans.

Bankruptcy cannot prevent a "secured creditor" from repossessing property. According to Nolo.com: "A bankruptcy discharge eliminates debts, but it does not eliminate liens. So, if you have a secured debt (a debt where the creditor has a lien on your property and can repossess it if you don 't pay the debt), bankruptcy can eliminate the debt, but it does not prevent the creditor from repossessing the property."

4. If your unsecured debt is $10,000 or more, debt arbitration could save you more time and money than bill consolidation. Here is why: With debt settlement, your unsecured debt is reduced by up to 50% and you will not have to pay added interest on the remaining balance. This is not the case with bill consolidation, where is there is only a reduction in interest rates. As a result, a debt settlement program can have a shorter repayment term than a bill consolidation one.

5. There is no public record that you have ever settled your

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