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What is Debt Settlement or Debt Negotiation?

Debt negotiation is basically another way to describe debt settlement. The negotiation is typically done by a debt settlement company and entails a process by which they reduce your debt by getting your creditors (the people who you owe the money to) to accept a smaller amount than you actually owe to satisfy your debt obligation to them.

The “negotiated” amount is called a settlement because it is a legally binding agreement that, once paid, releases you from having to pay any more than the negotiated amount.

Although it may seem odd, the debt settlement process is a negotiation in the truest sense of the word. Your creditors will look at what you offer to pay them and how soon you say you are able to pay them and then decide if they accept your offer. This process is typically done by either a lawyer or a specialized company that is in the business of helping consumers negotiate their debts down after their accounts have gone into default.

These debt settlement companies already have the established relationships with most major creditors and they understand the legal procedures and paperwork that is involved in this complicated process.