- What is Debt Consolidation?
Learn how debt consolidation works to reduce interest rates and save money.
- What Can Be Consolidated?
Types of high-interest debts commonly used.
- What is Debt Settlement?
Often confused with, but significantly different than consolidating.
- What Debts Can Be Settled?
Learn what kind of creditors that will often settle for less.
- How Do Bankruptcies Work?
How Chapter 7 and Chapter 13 bankruptcies work, and the aftermath on your credit report.
What Types of Debts Can Be Settled?
Generally speaking, it's a possibility for the majority of un-secured debts to be settled for less under the proper circumstances. An un-secured debt means there was no collateral involved in getting the financing, like credit cards or student loans for example. Some examples of secured debts would be things such as auto loans or mortgages, which would be used for collateral.Here are some unsecured debts that can be settled for less:
- Collection agency debts
- Department store credit cards
- High-interest credit cards
- Student loans
- Personal loans (unsecured)
- Medical and legal bills
- Tax debts
- Old service bills (such as utilities)
The debt settlement terms can differ vastly depending on the debtors predicament. Lenders are not obligated to consider settlement propositions offer by consumers. It's more then likely for a lender to contemplate proposals when they are in fear of the debtor filing for bankruptcy, in which partial settlements are still usually preferable to what would be received from a bankruptcy. Although this method is possible it's not very probable.
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