Debt settlement is a plan to renegotiate the amount of unsecured debt you owe so that the amount paid is less than that owed, yet is accepted as full payment of the debt.
It is a process of negotiating payoff amounts with your creditors. In exchange for an agreed-upon one-time payment -- for instance, half of what you owe or 50% of the principal balance -- the creditor forgives the rest of your debt.Only unsecured debts are the ones that can be considered in debt settlement. These unsecured debts are:
- Unsecured Credit Cards
- Unpaid Overdue Rent
- Unsecured Personal Loans
- Past Due Utility Bills
- Unpaid Medical/Hospital Bills
- Auto (repos)
- Gas/Oil Cards
- Department Store Credit Cards
