settle debt

Melissa is a mother of 2, lives in Utah, and writes for a multitude of sites. She is currently the EIC of HarcourtHealth.com and writes about health, wellness, and business topics.

If you’re having trouble paying off your debts, it may be time to look for other solutions. Bankruptcy can offer some relief from loan payments, but it’s an unpleasant process that will have long-term negative consequences regarding your ability to get a loan or even get a good job in the future. You might want to consolidate your loans or negotiate for some debt forgiveness, but for certain people and situations, the best solution might be debt settlement.

Debt settlement has the ability to remove a major portion of your debt, but like everything else, it comes with strings and conditions attached. Some debts and some financial situations don’t qualify for settlements, so you should look somewhere else for help in those situations. However, if any of the following situations sound familiar, and if you owe more than $7,500, you may be able to get a settlement for your debt.

  1. Credit Card Debt

Credit card debt is one of the most common reasons people need a settlement or some other form of debt relief. Credit card companies don’t charge interest if you pay off the balance within a month, but if you don’t, the interest tends to be higher than what you’d see on an auto loan or a home mortgage. That makes it important to find a way to reduce your debt or turn it into a loan with a lower interest rate. Settlement companies and law firms can help, as well, although you’ll have to rebuild your credit score after an initial hit.

  1. Medical Bills

Hospital and clinic visits can demand big fees if you have no insurance, and even if you do, you may have a policy that doesn’t kick in until after you pay several thousands of dollars in deductibles. Medication is also expensive, and prices always seem to be going up. Fortunately, medical bills are a form of debt covered by debt settlement, as long as you can prove that you aren’t able to eventually pay the bill in full.

A debt settlement company can often negotiate a considerably lower total debt so you’ll have less to pay and can start rebuilding your credit rating sooner. Just be careful about which settlement company you contact, because many of them will promise more than they can deliver.

  1. Resold Loans

When a bank or other company decides it won’t get the full amount of a loan or bill, they’ll sell the debt to a collection agency. The agency will then do everything possible to get as much money from the debtor as possible. No matter what kind of debt you had before, if a collection agency currently holds it, you can get a settlement for a much lower amount. Doing this will hurt your credit rating, but once you’ve paid the debt off, you can start rebuilding your score.

Debt settlement isn’t a guaranteed process, and it’s not for everyone, but it can be a big relief to the people who qualify and choose a trustworthy debt settlement company or law firm. The negotiations may take months or even years, but at the end of it, you’ll have a monthly payment you can afford.