The Actual Amount You Pay For A Debt Settlement – It May Surprise You!

If you’re in the process of enrolling in a debt settlement program, you may have been told that you should be able to expect a 50% settlement on the balance of your accounts.

This may be true, and in many cases companies can secure a settlement for less than 50%. What you should know is that these percentages are based on the balance at the time of settlement.

What I mean by that is simple. It may take months for your accounts to be settled.

During that time when you’re accumulating enough money for a settlement, your accounts may very well also be accumulating late fees and collection fees.

What this means is that your account balances are growing while you’re accumulating the funds from which to settle those accounts.

So, by the time you’ve accumulated the funds to settle an account, that account balance may have grown by say 10% maybe more.

As an example, if you have an account with a $2,000 balance at the time you enroll, by the time you’ve accumulated enough funds to settle the account that balance may have grown to $2,200 or $2,300.

50% of that amount is more than 50% of the amount for that account when you enrolled in the program.

Fortunately most settlement companies are able to secure settlement for less than 50% at that time, so the overall impact on the projections of your plan shouldn’t be off by much.

And you also have to keep in mind that – you’re probably being charged a settlement fee – which is usually 25% of the savings they obtain for you, So.

The overall amount you pay including the settlement fee and late and collection fees could be more than 50% But considering the alternative is filing for bankruptcy and having to go through a somewhat embarrassing process. It’s worth it.

So, be aware that when all is said and done, your overall out of pocket expense for a settlement program could be more around the 60 – 65% range of the original balances at the time of enrollment.

That’s considering late and collection fees you may be charged on your accounts while you’re accumulating the funds for settlement and the settlement fees you may be charged.

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