What is debt resolution vs debt settlement?

Question

What is debt resolution vs debt settlement?

Answer

Debt resolution is a similar process to debt settlement, but it opens additional avenues for the company using this service. In a debt settlement, the debt negotiator works with the lender to come to an agreement on the amount of debt that must be paid back to pay off the debt in full, for less than what is owed, but faster than making minimum payments. With a debt resolution, other solutions may be available as well.

Debt Resolution Explained

In many cases, the terms debt resolution and debt settlement may be used interchangeably, depending on what the company wishes to call the service provided. However, there can be differences in these programs.

  • Most debt resolution programs charge a significant upfront fee for the service. This does not provide any guarantee that the service will work.
  • In some cases, the debt resolution may not settle the debt for less, but may stop interest payments and late fees.
  • The resolution may help to restructure a payment plan with the lender if the borrower has simply stopped paying the debt, even if no settlement offer is agreed upon.

When considering any type of debt settlement, compare the various types of programs available and work with a trusted debt settlement attorney over these programs whenever possible. The attorney will work with you to find a solution right for your needs and is unlikely to charge you as much for the service. Note that not all programs are the same. Learn what debt resolution companies will provide specifically before working with the company.

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