Debt Settlement

What is debit settle? Debit settlement is the process of negotiating with your creditors, so that they may be willing to accept less than what you owe on your account. Companies that do this process do it with the understanding that you will pay them if they are able to reduce or remove your debt.

How does debit settle work? Usually, it can take 3 to 4 years to finish. The reason is debit companies ask you to stop paying on the accounts and then you start saving that money for when it is time to try to settle your debits.  Once you have saved enough money then the debit company will reach out to the creditors and offer to make a lump sum payment for less than the amount that is owed as an alternative to getting no payment at all.

Once the negotiation is successful where the creditor accepts the amount, then typically the debit company will charge you around 15% of the debit as their fee.

How does debit settlement affect your credit? The biggest effect is on your credit payment history. Once you start the process your first instruction is to stop making payments to your creditors and start making payments to your savings account for the debit settlement. This will typically give you a steep drop in your credit score. Creditors will start to add the overdue payments to your report until they place it in collections, they charge them off, or they sell the accounts to other collection agencies.   Once the creditor accepts the settlement, typically the settlement will include the removal of the negative debit from your credit report. This will help your credit score since the negative debit is no longer reported. Then you can start to rebuild the credit score without any negative debit on the report.

What can you do before debit settlement? Credit Repair. This is where we first try to remove as many negative accounts as possible from your credit report before we use debit settlement as a backup plan.


A Goal without a Plan is just a Wish. Give us a call TODAY at 844-FIX-URCR or click on the following link to schedule your FREE consultation and create your personalized plan to achieve your credit and debt GOALS!


*Individual results may vary. Please call for more details and to discuss your own individual situation.