Debt settlement is an attractive option if you are currently immersed in a great deal of credit card or other unsecured debt. Consolidating payments from many down to one, reducing interest rates and thus reducing payments, and forgiveness or elimination of some of your debt are all attractive lures when it comes to paying your bills and trying to get your finances in order. You might have questions, though, and foremost among them, what are typical debt settlement payments? What, in hard numbers, can you be expected to pay each month once you have begun a debt settlement program?
The answer to this question depends a lot on the amount of debt you have, and the terms of the settlement procedures that you have worked out with your creditors. However, there are certain constants which can help you determine what you will pay:
Fees are a variable. You will want to check with your debt settlement company to find out how much they charge. Typically, 15-18 percent of the total debt is a common fee charged by the settlement company for doing you the service of negotiating and settling your debt. So, that same $10,000 discussed earlier, could be around $11,500 after a 15 percent fee from your debt settlement company. This would boost your three year payments to around $320 per month to cover the principal of the debt settlement plus the fees charged by the debt settlement company.
The longer you prolong your debt settlement period, the higher your payments will be, as the settlement companies know that there is a better chance of default on the amount you settled the longer it takes you to repay it. Therefore, your fees and interest would be higher if you elect to use the five-year debt settlement repayment period when the three-year period might be more economical. Your payments will be lower but you will pay more in the long run.
If you are interested in consolidating or settling debt, you should consult with an experienced debt settlement attorney. Your attorney can help you negotiate with your creditors to lower your payments and fees so your monthly payment amount can be more affordable. With an attorney as your advocate, you can negotiate a good deal with your creditors and start paying off your debts and getting into better financial shape.