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What Types of Debt Can I Settle?

To make things clearer, let’s distinguish between two major categories of debt: secured and unsecured. In the case of a secured debt, a valuable property, such as an automobile or a home, is offered as a promise to the creditor if the debtor is unable to make his payments, or defaults, on the loan. You will be unable to settle these debts, because the creditor will look at the promised property as the "settlement" itself. FTY - "Debt Settlement" and "Credit Card Settlement" are often used interchangeably.

In the case of unsecured debts, there is nothing being promised as repayment. These loans are usually given to people who have good credit. Since creditors have no way to ensure that they will receive anything from you, they will be much more willing to settle these types of debts.

Unsecured debts consist of:

  • Bounced Checks
  • Credit Cards
  • Personal Loans
  • Medical Bills
  • Department Store Cards
  • Gas Cards

Unsecured Debts Usually Consist Of:

  • Home Mortgages
  • Equity Loans
  • Auto Loans
  • Recreational Vehicle Loans (boats, RV's, etc)

One thing to note however, in most states, failure to redeem a bounced check can be criminally prosecuted. If you have any outstanding bounced checks, get these paid first, even if it means payment in full without reduction of the amount owed. Criminal charges will follow you for life, and could land you in jail!

Here are the two cases when the creditor will settle with you:

If the Creditor feels it is in the company's best interest to settle (you can persuade them it is their only chance to receive something)

If they believe you do not possess many assets (there is no point in suing you because even if they win, there’s nothing they can collect from you).

So, this means that if you've always been punctual with your payments and then you suddenly call up your credit card company to inform them about your difficulties, they will certainly be doubtful and will hardly make a deal with you.

Of course, this doesn’t mean that you should stop paying your bills just to encourage them to settle. It’s always better to first have a sincere discussion with them. Contact one of the reputable debt settlement companies today to determine if debt settlement is right for you.

Aaron T. Landreth

Aaron T. Landreth

Hello! My name is Aaron. I am the Co-Founder of LegalCreditCardSettlement.com. It is my job to make certain that the information you find on this website is of value, compliant with all FTC regulations and to help educate you about the process of debt settlement versus other debt relief options. Please contact us with any questions or concerns you may have.

Website: www.LegalCreditCardSettlement.com E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

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