Debt settlement can be an excellent option for getting out of debt relatively quickly without having to file bankruptcy. Whether it’s the best solution for you will depend on a few key criteria.

First, debt settlement works best for people whose debt is fairly high to quite high, such as between $30,000 and $100,000—and higher. This is not a hard-and-fast rule, of course, but it’s a general guideline to keep in mind. Creditors who are owed large amounts tend to be more likely to “settle for less” because higher debts run a higher risk of default. If you have credit card debt in excess of $30,000, you’ve come to the right place.

The second requirement for debt settlement has to do with whether you have any savings or liquid assets to use for making a lump-sum payment to your creditors. You’re a good candidate for debt settlement if you have cash or other liquid assets to pay approximately 50–60 cents for each dollar you owe. Creditors are generally willing to discount a debt (that is, to accept less than the full amount they are owed) if you can pay off the reduced amount in a lump sum. For instance, if you have credit card debt of $100,000 and you have $55,000 available to you now, it’s likely that your creditor will settle for a one-time payment of the lesser amount. While creditors might allow you to pay the reduced amount in up to three installments, the sooner you can raise the money to make one lump-sum payment, the greater your discount is likely to be. And with a qualified debt settlement attorney handling your negotiations, you can expect to get an even better settlement.

Even if you don’t have 50–60 cents on the dollar for a lump-sum payment, debt settlement may still be a good option for you. Continuing the above example, if you have just $25,000 available now but you’ll be able to raise another $30,000 within 18 months, you may still be able to settle your debts at a discount. Call us at 303-520-3414 today to find out how Trident Debt Solutions can help you settle your debts for less!

 

Steve Craig is an experienced bankruptcy and debt-settlement attorney based in Denver, Colorado.