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Debt settlement companies work with your creditors on your behalf to negotiate your total debt amount with the aim of reducing your repayment responsibility. These services arent free. Youll be charged a fee typically between 15 to 25 percent of your total debts enrolled after your debts are settled.

Debt settlement companies work with your creditors on your behalf to negotiate your total debt amount with the aim of reducing your repayment responsibility. These services arent free. Youll be charged a fee typically between 15 to 25 percent of your total debts enrolled after your debts are settled.

And, depending on the program, you may be able to get your interest rate lowered or have certain fees waived. Under the terms of a debt management plan, while you may receive more favorable interest rates or relief from fees, you still repay the entire principal amount owed.

Debt relief or settlement companies are companies that say they can renegotiate, settle, or in some way change the terms of a persons debt to a creditor or debt collector. Dealing with these companies can be risky.

It typically involves hiring a debt relief company to employ one or more strategies that help you get debt under control, such as by reducing the amount you owe, lowering your interest rate, or securing better terms. Learn how debt relief programs work and whether they may be right for you.

Debt relief services may have a negative impact on your credit score, but that impact may not be as big as you think and in some cases, it can help your credit. How these services impact your credit depends on the debt relief option you choose.

Debt relief services may have a negative impact on your credit score, but that impact may not be as big as you think and in some cases, it can help your credit. How these services impact your credit depends on the debt relief option you choose.

These companies charge customers in several different ways. Some charge a percentage of the payments made to the lenders. Some keep the first one or two payments for administration costs, which can cause the customer to be considered delinquent from the creditors standpoint.

Offering 25%-50% of the total debt as a lump sum payment may be acceptable. The actual percentage may vary depending on the circumstances of the borrower as well as the prevailing practices of that particular collection agency. One benefit of negotiating settlement terms is likely to reduce stress.

Debt settlement companies typically ask you to stop paying accounts you enroll in the plan and instead put the money in an escrow account. Each creditor is approached as the money accumulates in your account and you fall further behind on payments.