Debt settlement is a process through which you can clear 40% to 60% of your debt. You can usually become debt-free within one to three years. For many people, this sounds too good to be true. How can debt be eliminated to such an extent and how does this process work?
Debt repayment from creditors
Why do lenders choose to let 50% of debt fall? Most lending institutions know that if you are applying for debt liquidation, you are likely to face a lot of financial difficulties, and you will face the possibility of failing to pay off credit. They know that if you default or file for bankruptcy, the entire loan amount will disappear.
Debt liquidation is a way for them to reduce losses and still obtain a certain percentage of loans. In other words, if they think that your risk of default is higher than what they have lost through reconciliation, they will reduce your loan rather than take the risk.
Debt Settlement
From your perspective, if your unsecured debt exceeds $7,500, debt liquidation is usually a good solution. You can eliminate 40% to 60% of your debt. Your payment terms and interest terms can be negotiated. You can get rid of debt within 12 - 36 months. In addition, you will no longer receive those pesky payphone calls.
How it works
Once you decide to start the debt liquidation process, you will get a representative. The representative will contact all your lenders and let them know that you are now in the process of settlement. This will prevent most lenders from contacting you again and instead contact your billing company.
Your clearing company will negotiate with each of your lenders. Once they have reached a successful solution, you will get new terms.
It's that simple!
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Orignal From: What is debt liquidation and how does it eliminate debt?
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