The difficult thing about the credit world is that every single debt is going to be a little bit different from the next. Since no two debtors are going to be in the exact situation, this creates a market where it's difficult to give everyone the same advice. What might work for one person could be a terrible solution for the next. With that in mind, settlement is something that is not for everyone, though a lot of individuals could benefit from it. So who is a good candidate for debt settlement? What kind of situation would lead one to want to settle his or her debts?
How old is the debt?
Something that everyone should understand about the settlement market is that it rewards debts that are older and that have been past due for the longest time. Though it might seem rational to think that these are the worst debts, they actually work out the best when you are talking about trying to settle. As a general rule, people who have debts that are more than a few years old will be in the best situation when it comes to negotiating with creditors. This is what settlement is all about, because you have to have the leverage on your side if you want to be successful in getting the best possible deal.
Can you afford to make a large, lump sum payment?
One of the requirements of debt settlement is that you are able to make a big payment right at the beginning. In order to get a nice deal on your debt where you are paying something like 30% of the total balance, you have to be able to cut a check to the creditor right away. Not every single person has this money laying around, so it is an option that isn't available to everyone. If you do have the ability to either draw something from savings or put some money into a fund for your future settlement, then it can be a really good option. This is the most important thing that settlement rests upon, so you have to make sure that you have the means to do it.
Ultimately, settling your debt is something that can really help if you have the right kind of debt. For large debts and old debt, this is absolutely the best way of eliminating it. There are debt companies out on the market today that will help you understand the best options for your situation, whether it is settlement, consolidation, or some other means of debt removal.