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Debt relief, on an individual level, refers mainly to the negotiation for a reduction of a debt by either the consumer or a debt settlement agency. Through this arrangement, consumers agree to pay the creditor a fixed amount of money (generally a discount on their outstanding debt) either in a lump sum or under a payment plan.
A portion of each payment is taken as fees for the debt settlement company, and the rest is put into the trust account. The consumer is told not to pay anything to the creditors. The debt settlement company's fees are usually specified in the enrollment contract, and may range from 10% to 75% of the total amount of debt to be settled. [13]
Potential debt reduction: Debt settlement may reduce the total amount you owe, providing relief from debt burdens. However, the fees of settlement and late fees can sometimes inflate your debt ...
When your bills are overwhelming, debt settlement is one way forward.
Getting debt relief through debt settlement If you have over $7,500 worth of unsecured debt and your credit is in bad shape, then seeking a program through a good debt relief company may be your ...
The discount, or charge, is the difference between the original amount owed in the present and the amount that has to be paid in the future to settle the debt. [ 1 ] The discount is usually associated with a discount rate , which is also called the discount yield .
Debt settlement is a process that lets you settle large amounts of debt for less than you owe, and it is offered through for-profit debt settlement companies. Typically, these programs ask you to ...
The Act prohibits specific acts on the part of a service including: misappropriation of funds in trust; settlement for more than 50% of a debt with a creditor without a debtor’s consent; gifts or premiums to enter into an agreement; and representation that settlement has occurred without certification from a creditor.