Going through debt settlement is a good way to make sure that the debts a person or family has collected will be paid without the person having to file for bankruptcy.
(prHWY.com) February 15, 2012 - Philadelphia, IL -- Going through debt settlement is a good way to make sure that the debts a person or family has collected will be paid without the person having to file for bankruptcy. In fact, many people have used debt settlement services offered by Debt Shield to pay off or reduce their debt and avoid bankruptcy.
Understanding how the process of settling debt works is the first thing a consumer has to do before deciding if this is a good option for him or her. In general, a person starts the
debt settlement process when it becomes difficult to pay his or her bills. After calling Debt Shield, a professional with the company will start by listing all of the debts the consumer owes, along with their minimum payments, total amount, and interest rates.
Working from this list, Debt Shield is able to negotiate with every one of the consumer's creditors to either reduce the loan's interest rate and/or charge-off all or a portion of the debt.
Debt Shield has relationships with a lot of lenders. Based on this relationship, lenders will often agree to accept a partial payment on a loan instead of the total amount due from the borrower on a debt. Lenders are willing to make this deal if they think it will prevent a borrower from declaring bankruptcy. The threat of losing all of the money that they have invested if a person declares bankruptcy is what motivates each of these creditors to negotiate with Debt Shield. Banks realize that lowering the monthly payments so that a person can pay all of their bills every month is the only way to make sure that they will receive a return from its investment.
Of course, it is important for anyone considering this as a way to get out of debt to remember that all creditors that agree to settle their borrower's debts are considered to be writing down or forgiving the debt or debts that are owed by the borrower. According to current tax law, the amount from each loan that is forgiven or discharged is subject to taxes. Consumers should consult a tax professional to find out if this has implications for them.
In general, settling debt can be a good way for a person to pay off their debts sooner and make their debt payments manageable. Consumers should talk with a professional from Debt Shield to determine if this is a viable option for them.
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