How Debt Settlement Works:

If you have fallen behind on your monthly credit card payments it may be time to consider debt settlement. Debt settlement is a proactive approach to resolving your credit card debt.

Companies that specialize in debt settlement work with creditors to lower your principal balance owed for all types of unsecured debts including credit cards, medical bills, payday loans, unsecured personal loans, and collection accounts. Instead of failing behind on payments without a plan a reputable debt settlement company will help you to strategically default on the accounts and immediately have payment relief. The debt settlement company will help you to create a dedicated savings account and you will make monthly deposits to that account each month. As you accrue funds in your dedicated savings account the debt settlement company will begin to restructure payment plans with your creditors taking into consideration factors such as your income type, ability to save, and the type of creditors that you will be enrolling. Once the debt settlement company determines that there are sufficient funds in the account to support a lump-sum offer or term payment, they will reach out to your creditors on your behalf and put into place the new repayment plan.

 Debt Settlement Plan Overview:

  • Instead of paying your creditors, you make monthly deposits to your dedicated savings account which you control.
  • In the meantime, the debt settlement company will begin to work with your creditors to restructure these repayment plans.
  • When you don’t pay it back to your debts, the creditor ultimately charges them off.
  • The charged-off debt is either sold to a third party debt collector or transferred to an internal collections department.
  • Lastly, the debt settlement firm utilizes the funds in your dedicated savings account to negotiate a partial debt payback (or settlement) with each of your enrolled creditors.
  • You as a client of a reputable debt settlement company will need to sign off and agree to each settlement before the debt settlement company will authorize payment to your creditor or collect any fees for their work.


Benefits of Debt Settlement:

  • You pay back less than the principal balance owed on your accounts.
  • No more harassing phone calls or late nights stressing about your debt.
  • You become debt free in months not years.


Why is debt settlement a good idea?

Becoming debt free is hard. It usually will require a significant change in your life circumstances such as a family member or friend helping you to pay off the debt, getting a large raise at work, or utilizing a reputable debt settlement company’s service. Debt settlement is an excellent alternative to just trying to “hack out” the debt. For people who owe a sizable sum of over $5000 and don’t have an alternative strategy, debt settlement becomes a very attractive option.

Disclosures by Debt Settlement Companies

Knowing the disclosures that debt settlement companies are supposed to provide to consumers may help you decide if debt settlement is the best option for you..

You must be informed of the following disclosures before signing.

  1. Debt relief companies are required to clearly state all costs, fees, and service limitations.
  2. The corporation must inform you of the time frame in months or years before making a settlement offer to each of your creditors.
  3. Before making a deal to each creditor on your behalf, the corporation must specify how much money, or what portion of each outstanding obligation, you must save in an escrow account.
  4. If the company asks you to stop paying your creditors, it is required to inform you of both the drawbacks, including how it will affect your credit report and credit score; whether creditors may file lawsuits against you; whether they may take collection action; and whether ongoing fees and interest accumulation will increase the amount you owe.
  5. You may owe taxes on a portion of your forgiven balance.

The debt relief organization must additionally disclose to you:

  1. You are entitled to the interest accrued on the money you save in escrow.
  2. The account administrator does not receive referral fees and is not connected to the debt resolution or settlement company.
  3. Your withdrawals are unrestricted even without consequences at any moment.


Is Debt settlement worth it?

Any reputable debt settlement company should first provide you with as much information about the process upfront so that you are able to make an informed decision whether debt resolution will be the best option for you. Before considering debt resolution you should attempt to resolve the accounts yourself by saving money, trying to work additional hours at work or even asking a family member or friend. After you have exhausted all other possibilities it is seriously time to consider debt resolution.

When you settle a debt, it means you and the lender have come to an agreement for them to accept less than the whole amount due as settlement on the account. The account will be listed as “settled” or “account paid in full for less than the full amount” on your credit report. The benefit is that through the debt settlement company you and your creditor have now agreed to payback terms that work with your budget. You no longer have to worry about harassing phone calls or the potential of having your wages garnished. You can now return to normal life and begin working on improving your credit score for the future.

Sit back and save, Landmark Legal will do the heavy lifting and settle your accounts saving you money. You pay $0 in settlement fees until we settle your first account. Landmark Legal always tries to maximize your savings by using certain factors like your income, state regulations, and types of creditors.  Landmark Legal is an A+ rated BBB company with over 50+ 5 star reviews on both Google and the BBB. Landmark Legal has a proven track record of resolving client accounts helping thousands of clients Save, Settle, and Live Debt Free


From America’s #1 Debt Relief Company

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