When your income is not being able to match up with your debt payments then it is time to choose debt relief options like debt settlement to get rid of them.
Settlement of debt enables a debtor to reduce the total balance that needs to be paid to the creditors.
There are certain criteria which need to be fulfilled in order to be considered as an eligible candidate for this program.
In this article we will highlight points which can help you qualify for this program.
1.
A debtor should have high amount of debt for the creditors to consider the proposal of settlement.
Generally a debtor needs to have at least ten thousand dollars in unsecured debt to avail this program.
The reason why creditors show less interest in lower balances because most of the debtors would not risk their credit rating for a small balance and hence will strive to make their payments in time.
2.
If your account has been past due by at least 90 days, your creditors will be open to the idea of settlement.
This is because as the time passes, they will have to sell the account to collection companies for a very low price.
So, in order to get some money back on the account they will be interested in settling your account.
3.
If your creditors are convinced that you might file for bankruptcy in near future, they will want to settle your account.
Since the credit cards give unsecured loans, bankruptcy would mean a complete loss for them as they do not attach any collateral to their loans.
Higher the risk of bankruptcy better will be the settlement for the debtor.
These are some of the points that a debtor can use while going for a settlement.