Debt settlement programs are actually quite simple, this is how they work:

Your current level of unsecured debt will be skillfully negotiated for you, and essentially you will end up paying a fraction of the debt. Generally, you can expect an estimate of reducing your debt by 60% of the current total.

You are set up with an affordable monthly payment, which is determined on a client-by-client basis between you and a counselor. Based upon what you are able to pay each month into your settlement account, your counselor can determine how many months you will be part of the program, and ultimately be debt free. Throughout the program, your counselor communicates with your creditors, on your behalf, and you will no longer be dealing with burdensome phone calls and letters from your creditors.

Upon enrollment, each of your creditors are immediately contacted, each one individually, and are apprised of your decision to work with a debt settlement agency; they know that you are being represented and of your interest in settling your debt with them. Reaching a settlement usually takes several phone calls and communication between your agent and the creditor. Once a settlement offer has been reached, and you as the client have agreed on this amount, you will pay the agreed upon amount from your settlement account. This is always done with your authorization, whether verbal or written.

At that point, the creditor has accepted the payment in full, and you are free of that debt forever. your agent will diligently continue to work on negotiating all of your debts, until you are finally free from the once overwhelming debt that you started the program with.

The main goal is to get you out of debt. the agency you choose will work only for their clients; not for the benefit of the creditors. Becoming debt free is the first step to becoming financially secure, and debt settlement may be your best option.

Putting it Into Perspective

To help you see better recognize the advantages and disadvantages associated with debt settlement consider the following scenario: If you have $15,000 in unsecured debt at an interest rate of 18%, are making minimum payments, on average, you will end up paying approximately $9,750 to settle the debt.

The Advantages:

• You can expect to pay approximately 65% of what you owe when all is said and done.

• Your monthly payment is flexible. You will be given three monthly payment options. Your program monthly payments will go into the Attorney's Trust Account and will serve as an important tool for negotiating your debts.

• You are assigned to a Settlement Representative who will insure you have the tools to ward off creditor contact during the negotiation process.

• You will be provided with a secured on line account where you can view your Trust Account balance and Settlement Offers. You will have the ability to Accept or Decline the Settlement Offers that are generated.

The Disadvantages:

• While you will get out of debt you may, in the short term, experience aggressive collection practices and negative postings from your creditors. Most agencies have tools to assist you in dealing with this.

How to Qualify:

• Provide your agent with a list of creditors.

• Your agent will provide you with three monthly payment options. Choose the monthly payment that fits your budget.

• Provide your agent with budget information and hardship reason. Your hardship reason is important as many creditors will inquire why you are seeking debt relief.

• Your agent will send you the required paperwork.

• Fill out paperwork.

• Make monthly program payments. You will be contacted by your Settlement Representative as Settlement Offers are generated.