Debt Settlement Blog

Debt settlement programs can help to reduce your debt up to 40-60%. This is done by skillfully working with your unsecured debtors in order to reduce the balances owed to them. Estimating the numbers for the program usually works as follows.

Most debt settlement companies surveyed say that on average they are able to settle accounts for around forty cents on the dollar. An example of that would be if a creditor was owed ten thousand dollars through negotiations they would receive about forty percent of that amount or four thousand dollars.

Debt settlement is not free however and most debt settlement companies charge fees of roughly fifteen percent of the total amount of debt owed to the creditors. If you had a total amount of debt of twenty thousand dollars and the creditors would get forty percent and that would be a total of eight thousand dollars. Then the fees for the program at fifteen percent would equate to three thousand dollars making the total payback amount including the fees would be approximately fifty five percent of what is owed totaling eleven thousand dollars to pay back.

Lower monthly payments would then be calculated on that amount of payback. Eleven thousand is the new total at this point. Debt settlement companies typically require you to complete the program in twenty four months or less. If you divided eleven thousand by twenty four months you would then have payments of four fifty eight a month for twenty four months or less. These figures will change based upon the types of accounts and the state that the consumer lives in.

The math can easily be done based upon any debt amount owed. You should consult an attorney to maybe see if they could settle the accounts with you for a flat fee in a sense possibly paying less monthly. Banking experts say that the debt settlement industry is paving the way to an all new approach to debt relief.