Life throws us curveballs, and some of those may result in substantial debt. If the amount of your debt feels overwhelming,
you may want to consider negotiating with your creditors to pay less than the full balance. There are two options:
You can negotiate with individual creditors yourself, or you can work with a third party who will negotiate on your behalf
to pay off debt on delinquent, unsecured credit accounts and personal loans over a specified time (or all at once).
For example, if you have a $10,000 credit card balance, you may only be required to pay
$4,000 to close and “settle” the account and have the remaining $6,000 forgiven.
Traditional Debt Settlement Company Fee
Resolve Network Fee
Not all companies that offer debt settlement services have your best interests in mind. Some charge hidden and excessive fees. (Read about a consumer’s experience here.) Some negotiate your accounts in an order that gets them paid faster rather than saving you the most money. When selecting a provider to help you negotiate with creditors, you can start by checking out the company with your state Attorney General and local consumer protection agency.In addition, the FTC cautions against using any company that:
You can find out more about different settlement companies here.
Resolve takes a different approach to helping people negotiate their debts. The negotiators in the Resolve Network charge rates that are fair and substantially less than traditional debt settlement companies. For example, while a traditional company charges 20–25% of your TOTAL DEBT, Resolve Network partners charge 15% of WHAT YOU SAVE.
Here’s an example to illustrate the difference:
Typical Debt Settlement Company
Resolve Network Service Provider
Your debt: $30,000
Your debt: $30,000
Your fee: 20-25% of your debt TOTAL
Your fee: 15% of your total SAVINGS
You pay $6K–$7.5K
If all your accounts settle for $14K, you’d be 15% of $16K (what you saved), which is $2,400.
It doesn’t matter how much they save you; you pay them the same amount.
You pay based on how much the Resolve Network service provider saves you.
Negotiating with creditors may or may not be the right option for you. You need to consider the risks, such as the possibility that you’ll be sued and, if you miss a payment, you may be back at square one. It’s also wise to consider how it impacts your credit and that you may owe taxes on the amount of debt forgiven on your accounts.
We recommend consulting a tax attorney or tax advisor for information specific to your situation, but here are some things to consider regarding the potential impact on taxes:
There are pros and cons to settling debts. Creditors will actually not settle with you unless you make late payments. These late payments have a negative impact on your credit score. In fact, on-time payment history is roughly 30% of how your credit score is factored. It’s likely, however, that you’re considering settling your debts because you’re already late on at least some of your accounts. Because this is already impacting your credit score, settling your accounts can help your credit heal and your credit score recover.
While you can negotiate with creditors directly, do your own research first. You can calculate what you might save with a debt settlement calculator and then use a debt consolidation calculator to assess if this is a viable option for you instead. You can also use a credit card payment calculator to assess how long it will take to pay off your credit card(s) if you don’t choose a settlement plan.
Debt Settlement Agreement — Build the contract for your settlement documenting the criteria you negotiate with your creditor.
Credit Dispute Letter — Draft a letter to dispute information on your credit report.
Debt Consolidation Calculator – Assess if debt consolidation is a viable option for you.
Credit Card Payment Calculator – Discover how long it will take to pay off your current credit card balance.
While the tools listed above can help you explore your options for getting out of debt, you may find it challenging to determine the best course of action for your situation. That’s where Resolve comes in. Our primary goal is to assess your personal situation and help you understand your options.
What’s more, we offer a responsible alternative to debt settlement companies that charge high fees and prioritize getting themselves paid. Our solution prioritizes saving you the most money. In fact, our decision-making engine and debt guidance are free. You can review and compare your options and ask our experts questions. And you can get debt settlement estimates and a settlement plan for free.
There is no cost to you unless you decide to work with one of the service providers in the Resolve Network. Our partners can help you achieve your goals and may be able to help you avoid debt settlement.
If you haven’t yet created a Resolve account, you can get started here.
We use bank-level security with 2048-bit SSL encryption and will never share your info without your consent
Resolve is an accredited company with the Better Business Bureau
We were selected as a winner of the prestigious CFSI Financial Solutions Lab by J.P. Morgan Chase