Many people simply don't understand how debt settlement programs work.

The debt settlement program is very different from the debt consolidation program. Number one, in the DS program we settle your debt for less than what you actually owe, typically 40% to 60% of your balance. This will vary from creditor to creditor. Some accounts can be settle for as little as 20% of balance and others might be as high as 80%.

One other major factor to take into account is your balance, if it's less than $1200 generally it will settle at a higher percentage than a balance that's higher than $1200.

A lot of people ask... Can I get sued while I'm in a debt settlement program? The answer is yes. A creditor has the right to sue you at any time that they wish period. Weather you're one day late on a payment or 1 year late, ultimately the creditor has the right to take legal action whenever they want.

I'm sure that raises a flag right? Being sued is not the end of the world. A creditor can not take your house or your car or stop by and demand your TV as payment. If you get sued by a creditor and lose the case, you will have a judgment against you, which is just a legal document saying that you actually do owe them money.

understanding how debt settlement really works

If you have a judgement against you and you own real estate, a lien will be placed against your property until the judgment is satisfied. What does that mean? Well, if you try to sell your home prior to satisfying the judgment, you will have to include the judgment amount in the sale price of your house. However, if you use the debt settlement program and settle or satisfy the judgment before selling your property the lien goes away.

The best thing that you can do while in the debt settlement program is to pay in as much as you can afford to avoid legal action. The truth is approximately 80% or more, of all creditors Do Not choose to sue.

There are a few banks in particular that are trigger happy to sue their clients within the first year of not receiving a payment, the two main ones are Bank of America and Citibank. Therefore when in a debt settlement program, if you have either of these two banks as creditors, they should be the first to be paid off to avoid legal action.

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