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Debt settlement involves forecasting your financial capabilities to your unsecured creditors with an estimated settlement amount based upon what you truly have the ability to pay. Often, people choose to utilize the services of a professional debt settlement company rather than attempting to do it on their own. In order to fully understand and appreciate the process that takes place between debt settlement companies and your unsecured creditors, consider the following: Creditors know that roughly 1/2 of those who filed bankruptcy had the financial capabilities to pay back on average just under half of their debts through debt settlement programs. About 95% of clients who enroll into settlement programs have exhausted all available cash resources before they realize they are in trouble. They do so by taking cash advances because they still have available limits on their credit cards and exhaust monies in checking, savings, and retirement accounts. They even use all the equity available in their homes as second mortgages at the risk of foreclosure. Therefore, it is imperative to be proactive and search for a solution when struggling to maintain your debts at their current terms and rates. One important point to remember is that creditors can't get what you don't have. If you find you don't have the ability to make the full minimum payments after putting a pencil to your expenses, a debt settlement program may be your best alternative.
Due to bankruptcy reform, many consumers who may have once qualified for chapter 7 are now being pushed into chapter 13. Creditors recover far more through our programs than they do when a consumer files for bankruptcy. They recover on average almost twice as much money through settlement programs than they do from bankruptcy or even their own collection efforts. Most consumers would rather find alternatives to bankruptcy if they knew about other available options such as debt settlement. Our network of debt settlement companies employ strategies and work with consumers that have legitimate financial hardships and honestly have a want and need for assistance.
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