Debt Settlement and Negotiation
Debt settlement involves negotiations with a person’s creditor and is most commonly used by someone who is past due on their bills. During debt settlement, the goal is to come up with a mutually agreed upon settlement amount. This process can actually present advantages for the person in debt and the creditor because the creditor gets paid and avoids having to pay legal fees to collect debt. Also, the creditor is willing to accept a settlement instead of the customer filing bankruptcy and them receiving nothing. The person in debt may actually save money by settling his or her debt for less than the balance originally owed. Once the debt is paid, the person can start the process of restoring and building credit.