What is Debt Settlement?
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Debt settlement is the process of talking with your creditors or “negotiating” and working out a reduced payment amount for your total balance.
In some cases you can reduce what you owe by 40 to 60%. Your results will vary.
It is not available in all states so you may not even be able to benefit from debt settlement unless you do it on your own.
You may get sued when using debt settlement.
You may owe taxes on the debts that are wiped out. But this is a small point when you can reduce your total balances by almost half.
Your credit score will go down because you are not making regular payments to your credit cards.
There are a lot of companies out there that are not reputable. You have to do some research on the companies you are thinking about going with.
Debt settlement is a last resort option before filing bankruptcy. You can use this as leverage when you are working out a settlement. You can say you are going to be forced to file bankruptcy if they do not work out an agreement with you.