- You may be able to settle your debt yourself, but hiring a professional to look into your situation and help negotiate all possibilities may be a less stressful way of going about your settlement. The professional will review your debts and see which, if any, are able to be settled. Credit cards are the most common form of debt to be settled. Student loans are not negotiable, and mortgage payments are very rarely negotiable.
- Once the professional has reviewed your debts, they will contact your creditors and negotiate a settlement amount. The amount is usually 30 to 50 percent of your original debt, but can occasionally be as high as 80 percent. The payoff process can take several months or several years, depending on your income and settlement amount.
- Debt settlement will affect your credit rating, but not as severely as bankruptcy or foreclosure. In many instances, those who are looking for a debt settlement program are already on the brink and therefore a settlement will help work your credit score back to a positive level.
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