When Debt Consolidation Makes Sense

LOS ANGELES - April 7, 2015 - PRLog -- Credit card debt settlement is an agreement between an indebted consumer and a creditor that entails the consumer submitting a lump-sum payment for the majority of what they owe in return for the company that owns the debt forgiving part of the outstanding balance as well as certain fees and finance charges.

Unfortunately, the need to settle debt arises far too often. Consumers consistently spend beyond their means and eventually see their balances spiral out of control when interest charges and fees become unsustainable.

“Credit cards have two properties that can prove irresistible to consumers,” says Jonathan Chase, associate professor of business administration at UCLA and co-author of Smart Money Management: The American Is Alive and Well. “First, they allow us to have nearly anything we want right away. … Second, they reduce what researchers call the ‘pain of paying.’ Forking over cash is painful because it makes the loss so salient, whereas credit cards make everything feel ‘free’ since the actual payment happens months after the purchase.”

http://www.nationaldebtreliefprogram.org/eliminating_cred...

Settling amounts owed is one way to escape serious credit card debt.

How Does Debt Settlement Work?

Overview:

First of all, it’s important to note that credit card debt settlement is only a viable option if you have already defaulted on what you owe or are close to doing so (i.e. you’re experiencing serious financial hardship).  In other words, you have to be around 180 days behind on your credit card payments to even qualify for consideration.

With that said, there are two basic types of debt settlement:  1) do it yourself debt settlement; and 2) service-assisted debt settlement.  You can also attempt to settle the following types of debt:

Credit card debt

Store card debt

Unpaid medical bills

Unpaid phone bills


The fundamentals, however, are the same regardless of which type of debt settlement program you choose or what type of debt you’re trying to settle.  Basically, the debtor approaches the creditor with a partial payment offer (anywhere from 30-80% of the full amount owed) and asks that the remaining amount be forgiven.  The creditor can then accept, reject, or counter this offer.

In summary, debt settlement is the process of paying off debt to a creditor after mutually agreeing to a sum less than what is owed. Usually, only unsecured debt, such as credit cards and medical bills, is eligible for settlement. This can be done with the assistance of a debt settlement company or, in some cases, an individual may choose to do this on her/his own.

The good news is that eliminating one's credit card debt can be just a click away.

National Debt Relief Program offers a free debt analysis and savings quote which can be taken advantage of at their website:

http://www.nationaldebtreliefprogram.org/