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f you go by the rulebook then debt settlement can be referred as the process where both the borrower and the lender meet to settle the remaining debt of the borrower. The amount, which has been agreed upon, is less than the existing debt of the borrower. A typical settlement may range from 25 to 65% of the remaining amount. Now let us have a look at the process as to how it works.

It is a negotiation between the borrower and the lender. The amount to be paid is decided after negotiations between the two parties. The lender tries to extract as much money as it is feasible. While the borrower for his part tries to settle the amount for as little as possible. Now the borrower may not have enough funds to settle. In this case, he has no option but to approach debt settlement companies. These companies help the borrower to set up a third party trust account where funds slowly accumulate so that the settlement process can be carried out.

These companies work regularly with credit card companies. Thus, they can easily come to an agreement with the lender. They generally settle for anything from 35% to 50% of the remaining amount, which is unpaid. However, there are many disadvantages here. In this world, nothing comes free. Debt settlement companies charge a fee, which is a percentage of the savings of the forgiven debt. The drop out ratio here is quite high. It is a 12 to 60 month programme. Many people tend to drop out in the middle leading to further problems.

Now you should approach only the best debt settlement companies if you do need to settle anything. You should only go for companies, which protect consumer interest. If you take stock, you will find that there are companies who do not handle calls from credit card agencies nor collection agencies. Therefore, make sure that your interest is protected.

Settlement is a risky affair and needs to be dealt with cautiously. If you pay, less you spoil your credit score. Thus, use it as a last resort only. There is no point in going for settlement when you are on the verge of bankruptcy.f you go by the rulebook then debt settlement can be referred as the process where both the borrower and the lender meet to settle the remaining debt of the borrower. The amount, which has been agreed upon, is less than the existing debt of the borrower. A typical settlement may range from 25 to 65% of the remaining amount. Now let us have a look at the process as to how it works.

It is a negotiation between the borrower and the lender. The amount to be paid is decided after negotiations between the two parties. The lender tries to extract as much money as it is feasible. While the borrower for his part tries to settle the amount for as little as possible. Now the borrower may not have enough funds to settle. In this case, he has no option but to approach debt settlement companies. These companies help the borrower to set up a third party trust account where funds slowly accumulate so that the settlement process can be carried out.

These companies work regularly with credit card companies. Thus, they can easily come to an agreement with the lender. They generally settle for anything from 35% to 50% of the remaining amount, which is unpaid. However, there are many disadvantages here. In this world, nothing comes free. Debt settlement companies charge a fee, which is a percentage of the savings of the forgiven debt. The drop out ratio here is quite high. It is a 12 to 60 month programme. Many people tend to drop out in the middle leading to further problems.

Now you should approach only the best debt settlement companies if you do need to settle anything. You should only go for companies, which protect consumer interest. If you take stock, you will find that there are companies who do not handle calls from credit card agencies nor collection agencies. Therefore, make sure that your interest is protected.

Settlement is a risky affair and needs to be dealt with cautiously. If you pay, less you spoil your credit score. Thus, use it as a last resort only. There is no point in going for settlement when you are on the verge of bankruptcy.