How to get rid of debt without getting an unsecured loan for people with bad credit

If your debt is overwhelming and you're finding you cannot pay your bills on time and would like to avoid collection calls, it may be time to consider debt settlement. Debt settlement is the process of negotiating and reducing your outstanding debt by as much as 40-60% of the amount you originally owe. The remaining debt amount is forgiven by the creditor, allowing you to get out of debt faster.

How does debt settlement work

Instead of handing you more debt in the form of a personal unsecured loan, for an upfront fee, a debt settlement company will attempt to negotiate the current debt you have, so your creditors will settle for less than the total debt. Let's consider an example:

Let's pretend you owe $50,000 on 5 credit cards and you are having trouble paying your payments, so we help you find a good debt settlement company to help you avoid going from poor credit to bankruptcy.

First, the debt settlement company would have you stop paying your creditors, and instead begin making payments to a trust account that the company creates for you.

After you begin making your payments to the account, the debt settlement company will handle your collection calls for your debts and personal loans.

Negotiaton begins. After you have accumulated a certain amount in your trust account, the debt settlement company will begin to negotiate with your creditors of your personal loans and other debt. Typically, your total amount of debt and loans can be reduced by 40 to 60 percent. This makes it so you won't need to get an unsecured personal loan to cover your bills.
Finally, you can begin accepting better offers from your creditors as time passes, and within approximately two years, you will have paid off your debts, bills, and other personal loans.

What debts can you settle

Unsecured personal loans, medical bills, and credit cards can all be settled using debt settlement, however, tax debts, mortgages, alimony, child support, car loans and federally insured student loans cannot.

How much are the fees for debt settlement

Approximately 20-30% of the amount that you save from the forgiven debt is what is typically charged by debt settlement companies. Considering the savings, this might be a better alternative to an unsecured loan for people with bad credit.

How long does debt settlement take

Although it varies based on the amount of debt, 2 to 4 years is typical. You'll probably have paid it off faster than you would if you take out a personal unsecured loan to help with your debt.

Can creditors sue after debt settlement

Some states including Alabama and Delaware, the creditor may still have the option to sue you under certain conditions, however, many states, including Arkansas, Texas, Georgia, Michigan, and Washington do not all creditors to pursue you after debt settlement.

Debt settlement and taxes

Cancellation-of-debt (COD) income, which is the amount of debt that was forgiven by your creditors is considered taxable and treated as income.

How to find the best debt settlement company

Loan Unsecured Bad Credit makes finding a good company easy. All you have to do is fill out the form and we will connect you with counselors from three of the companies that meet our tight requirements to be a part of our network. Soon after, you are connected with a reputable debt settlement company and on your way to becoming debt free.