Finding a Reputable and Knowledgeable Debt Settlement Company

Have you recently lost your job, been ill, or had an injury that prevented you from working? Or are you like many Americans who are finding it hard to pay all of the debts that they owe each month due to the current state of the economy? With gas prices still above what they should be, food prices mounting daily, and other expenses on the rise, it is no small wonder that the average American is having trouble paying their debts. Debt settlement is an option that many Americans are turning to in order to rid themselves of debt that is threatening to consume their whole existence.Avoiding Debt Settlement Company ScamsDebt settlement is a somewhat aggressive approach to reducing the actual balances that you owe to your creditors that can allow you to become debt free in a relatively short timeframe. Debt settlement does not happen overnight, however, and only through the use of an excellent and reputable debt settlement company do most borrowers find the relief that they are looking for.Finding a debt settlement company that can deliver on its promises is one of the biggest barriers to a comprehensive debt settlement. The truth of the matter is that many debt settlement companies are funded by the very lenders that you are seeking to negotiate your debt terms with, even those debt settlement companies that are listed as not for profit can actually be a front for a credit card company looking to collect. That is why it is important for consumers to thoroughly research the debt settlement company that they choose to work with before agreeing to any type of settlement or before paying any fees to the debt settlement company.How Debt Settlement WorksDuring debt settlement, a debt settlement company will negotiate with your creditors for a settlement of debt that is much less than you owe. Oftentimes, creditors will settle for as little as 30% of the amount of your balance due, and then simply write the rest of the account off as a bad debt. You will enter into an agreement by which you will make monthly payments (or sometimes lump sum payments) to be rid of the debt forever.The types of debt that qualify for debt settlement are credit card debt and loans that are not secured by property. Obviously, if you have pledged security to a lender, they would prefer to sell your property than to settle with you for less than you owe them.Debt Settlement vs. BankruptcyA debt settlement program can have adverse and negative effects on your overall credit rating, but it is a much more viable option than bankruptcy. In fact, bankruptcy is one of the worst possible actions that you can take as a borrower, especially if you ever have dreams of owning your own home. Bankruptcy remains on your credit file for up to ten years, an entire decade. Debt settlement can put you on the road to financial recovery and allow you to regain your freedom.