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How Debt Settlement Reduces Unsecured Credit Card Debt

If you read this article about unsecured debt you will understand that credit cards are promises to repay with nothing to back them up (like a physical asset or other collateral). Because of this, they can be negotiated (like any other promise or contract) should the borrower have trouble living up to thier obligations.

A debt settlement company acts as your negotiation agency and will attempt to reduce the amount of debt that you owe by negotiating with your creditors. There is a standard debt settlement process that you will go through on your way to becoming debt free.

Debt settlement companies can usually get your creditors to legally accept less than you owe them – sometimes up to 65% less but the results vary widely based on which company you use, your income, and your ability to remain on the program set up for you.

Given your inability to repay everything you owe, your creditors are happy to get at least some of their money back on past due accounts so you end of paying less than you originally owed.