Are you in a large amount of debt? Are you thinking bankruptcy is the only way to go? You may want to consider some of your other options. One of those is debt settlement. Debt settlement is a way that a consumer can reduce debt by reaching an agreement with the creditor on your balance that is less than what you originally owe. The final payment is considered payment in full. You can utilize a debt settlement company or you can attempt to settle it by yourself. The following are strategies for using a debt settlement company and doing it on your own:

DIY Debt Settlement Approach

If you want to settle your debt without the assistance of a debt settlement company, you can take some steps to clear your debt. One of the first things you need to do is save up enough cash so that you can offer your creditors a reasonable settlement. While you are saving cash, you can also ask your creditors about any hardship programs they may have in place to help you save cash by temporarily stopping you from having to pay your debt. Keep in mind, however, that if you are utilizing a hardship program, you should still be saving the payment you would normally make to your debt each month, along with additional cash you are saving for a settlement.

Once you have saved enough cash, call your creditors and tell them about your situation. Let them know that you have a certain amount of cash that you want to use to settle the account right away. Chances are you will not get an initial approval with the first person you speak with. You can then request to speak to a supervisor and pitch your settlement amount.

Remember that the creditors have no obligation to settle with you. While many will be willing to work with you on a settlement, not all of them will. However, it never hurts to make an attempt to settle your debt. It is a free option that only takes a small time investment.

Debt Settlement Company

If you do not want to settle your debts yourself, you can consider using a debt settlement company. Instead of paying your creditors, you will pay a fixed amount to the settlement company, who will in turn pay your creditors. They will do this by placing your payment into an escrow account. After the account reaches a pre-determined amount, the debt settlement company will help you with arranging a settlement with your creditors.

This option comes with a price tag. The debt settlement company will either charge a flat rate that is based on the difference of your debt and the settlement amount. They could also charge you a percentage that is based on the amount of debt owed. This option, while convenient, can be fairly costly if you have a large amount of debt.

When you are dealing with your debt, it is always wise to investigate all of your options. You may want to vet them with your attorney to ensure you are taking part in activities and services that are legal and will not land you in financial hot water. Contact a law office, such as Dunbar & Dunbar, for more information.