Debt Settlement
(Financial Restructuring)

If you are faced with massive debt, timley bill payment is difficult and you want to stop annoying and intruding collection calls, debt settlement may be a viable options. Also know as debt negotiation, debt settlement is a process by which your outstanding debt is settled for 40%-60% of the amount owed. By agreeing to this settled amount, the creditor is forgiving the remaining debt, thereby helping the client get out of debt faster.

The 4 Basic Steps in Debt Settlement...

• Client stops payment to creditors, and starts contributing to trust account.
• Collection calls are handled by the debt settlement representatives.
• Negotiation of debt happens a few months after program begins.
• Debt is lowered by 40%-60% in a overall shorter time period.

Brief History on Debt Settlement:

Lenders have been practicing debt settlement concepts for hundreds of years. Creditors are usually willing to settle because it means that they will receive some amount of money owed as opposed to nothing or very little if the client files for bankruptcy. Debt settlement became prominent in America when bank deregulation during the late 80s made lending to consumers easier. This deregulation was followed by a recession which created financial hardships for consumers. As individual consumer debts increased, banks established debt settlement departments to negotiate with defaulted cardholders.

Changes to Bankruptcy Laws:

Not only have personal debt loads risen but another under reported change in 2005 has driven the demand for debt settlement. Legislation now has made it more difficult for Americans to claim Chapter 7 bankruptcy. Currently anyone filing for bankruptcy will be required to meet IRS regulations or will be forced into Chapter 13 which is a debt restructuring plan.

For more information on debt relief options visit www.TotalDebtNetwork.com

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