How Does Debt Settlement Work?
Wondering How Does Debt Settlement Work? Here’s The Basics
Are you struggling to pay off a large sum of debt? Do you feel like you will never get rid of your debt? Feeling overwhelmed by the amount of debt you owe?
If you are one of the thousands of Americans who feel overwhelmed by debt, the first thing you need to know is that you aren’t alone. While debt is never a fun thing to deal with, it’s important to realize that you have people and resources available to help you find a solution and make a plan to be able to focus on future success rather than current struggles.
Debt settlement is a popular strategy that many consumers find helpful to manage their debt and get it under control. Debt settlement is a strategy where you are allowed to pay a lump sum of your debt to help ‘settle’ the debt. This is negotiated with creditors by a third-party company (like DebtQuest USA).
Debt settlement sounds simple enough, but obviously the process is not child’s play. It requires plenty of research, negotiation, and strategy to get to the final arrangement. It is not something we would recommend doing on your own as it can be a complex process working with multiple loans, creditors, and points of contact. We’ve been doing this for thousands of Americans over the years, securing millions of dollars in debt and saving countless sleepless nights. We know how to work with banks and creditors to help get you the best deal possible.
So, what does the process look like?
Debt settlement has a few core parts to the process that are important to understand.
- The first part of debt settlement involves talking to a debt relief company like us. We will walk you through your specific situation, ask questions, and answer questions about your options. We then will walk through our recommendations based on your unique situation. From there, we’ll get the necessary permissions from you to speak on your behalf to the banks and creditors.
- Once we get the approval, we will dive into your statements and accounts and start negotiating with the banks and creditors who hold your loans. We will be working with them to negotiate a set amount that can be paid on that loan in order to “fulfill” it, even if that number is not the full amount originally owed. This does take some time and may take many months depending on the level of complexity to your own situation.
- While we are working on your debt settlement, you will still need to pay into an account that is administered by a third party. This is an account that will help you pay toward that lump sum payment that is eventually decided upon. Depending on your situation, you may also be advised to stop paying the creditors until an agreement has been arranged.
- Once we’ve come to an agreement with your creditors, you’ll need to pay out the lump sum amount that has been negotiated. Once this is paid, you will not need to deal with the creditors again.
- You’ll pay a fee for the debt relief and negotiation work and at this point, payments for this will start to kick in.