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Debt settlement is essentially a negotiation service. You’ve probably heard of National Debt Relief, Accredited Debt Relief, or Freedom Debt Relief. These companies work by negotiating with your creditors to settle your debts for less than what you owe. The program is geared towards people who are nearing bankruptcy and have nowhere else to turn - making them often a bit restrictive and pricey. We don’t recommend this for people who are able to make their payments.
They negotiate with the creditors by offering a lump sum payment to your creditors in exchange for them forgiving part of your debt. The idea is that you pay the debt settlement company a monthly fee, and they use that money to negotiate with your creditors on your behalf.
Well, that's a bit of a tricky question. Debt settlement companies can be effective in helping people settle their debts for less than what they owe. But there are a few things you should know before you look into it:
Depending on your situation, you could avoid having to pay debt settlement fees by handling your debts in another way. Consider your options across the board, including balance transfers and debt re-finance. If you have that negotiation power in you, you could always try to negotiate with the creditors yourself! 👩⚖️
So, should you work with a debt settlement company? Well, that's ultimately up to you. It's important to understand the fees involved, the potential impact on your credit score, and the fact that there are no guarantees that debt settlement will work for everyone. As always, it's important to do your research and weigh your options before making any financial decisions.
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Join here. Terms apply.