It is great to get your debt settled but the negotiations can be very difficult.
You must take some free consultation from some expert debt settlement companies before you try to settle your debts.
Most creditors take you seriously only if you are a few month behind your payments and the debt amount is high.
Generally, a debtor needs to have at least ten thousand dollars in unsecured debt in order to get a debt settlement.
The main reason behind this is the risk involved if the debtor files for bankruptcy.
Creditors generally believe that a debtor who has been missing out on payments will eventually file for bankruptcy.
They are also interested in recovering at least a part of the debt amount rather than lose the whole amount if the debtor declares bankruptcy.
Creditors go with the belief that a debtor will struggle to make payments on his account rather than risk a bad credit score for a small amount of debt, hence they do not show much interest in settling smaller debts.
You can either settle the debt yourself or you can take assistance of a reputed settlement company to help you with the process.
In either case you will need to contact your creditors and offer them certain amount of money which you are willing to pay on that account to settle it.
A good settlement offer generally reduces a debtor's debt by as much as 40 % to 60 %.
However, the settlement amount varies from one creditor to another and is also influenced by various other factors.
A debtor must keep in mind the fact that this method will negatively affect the credit score.