Debt settlement is the process of negotiating with creditors to reduce overall debts in exchange for a lump sum payment. A successful settlement occurs when the creditor agrees to forgive a percentage of total account balance. Only unsecured debts not secured by real assets like homes or autos can be settled.

Unsecured debts include medical bills and credit card debts - not student loans, auto financing or mortgages. For the debtor, this makes obvious sense, they avoid the stigma and intrusive court-mandated controls of bankruptcy while still lowering, sometimes by more than 50%, their debt balances. Whereas, for the creditor, they regain trust that the borrower intends to pay back what he can of the loans and not file bankruptcy.

The Balance Legal Group works with a sister company that does only debt settlement (debt relief) If we find that debt settlement is the best choice for you we will refer you to them.