More Debt Settlement Strategies

Understanding Unsecured vs. Secured Debt and tips to settle your bills.

These debt settlement strategies can help you get out of debt faster, cheaper and back on the road to financial recovery.

Debts that are Good Candidates for Settlement

To make things clearer, let’s distinguish between two major categories of debt: secured and unsecured.

Unsecured debts consist of:

bounced checks
personal loans
student loans
medical bills
credit cards
department store cards
gas cards

Secured debts usually consist of:

home mortgage and/or equity loan
auto loan
recreational vehicle loans (boats, RV's, etc)

In the case of a secured debt, a valuable property, such as an automobile or a home, is offered as a promise to the creditor if the debtor is unable to make his payments, or defaults, on the loan. You will be unable to settle these debts, because the creditor will look at the promised property as the "settlement" itself.

In the case of unsecured debts, there is nothing being promised as repayment. These loans are usually given to people who have good credit. Since creditors have no way to ensure that they will receive anything from you, they will be much more willing to settle these types of debts.

One thing to note however, in most states, failure to redeem a bounced check can be criminally prosecuted. If you have any outstanding bounced checks, get these paid first, even if it means payment in full without reduction of the amount owed. Criminal charges will follow you for life, and could land you in jail!

Here are the two cases when the creditor will settle with you:

If the Creditor feels it is in the company's best interest to settle (you can persuade them it is their only chance to receive something)
If they believe you do not possess many assets (there is no point in suing you because even if they win, there’s nothing they can collect from you).

So, this means that if you've always been punctual with your payments and then you suddenly call up your credit card company to inform them about your difficulties, they will certainly be doubtful and will hardly make a deal with you.

Of course, this doesn’t mean that you should stop paying your bills just to encourage them to settle. It’s always better to first have a sincere discussion with them.

Where To Turn If You Want Help

Sometimes doing this yourself can be quite time consuming. Also, considering you aren't a debt settlement specialist, you might not get the best deal possible if you do it yourself.

Consider the savings you can obtain if you use a specialist who has the knowledge to squeeze the last cut penny from the creditor ... when a specialist has the contacts, knowledge and experience, you can save MUCH more than just 40% or 50% off what you owe. Get a free no obligation evaluation now.

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