What Types Of Bills Can Be Settled?

First, it should be reminded that debt settlement (or negotiation as it's sometimes called) is definitely not the same as consolidation. Because your creditors do not need to make any concessions when you consolidate, they have no say as to whether or not you can pay them off with a loan at a better rate (home loans might be the exception - in which case there may be additional fees for not riding out full the length of the loan). Debt negotiation on the other hand requires the creditor be willing to negotiate lower payments and/or a reduced amount owed. They are under no obligation to do so, and those that will usually have their reasons for accepting debt settlement over their alternatives.

If you've got a secured loan, one that is held with collateral - there's virtually no chance of the lender taking less than what's fully owed, because they have the option of repossessing the collateral to recoup their cash. In some cases (such as a mortgage again), it can even be in their financial best interest to repossess something that's been largely paid for - as they are under no obligation to 'pay back' the borrower any profit they may make from the sale of what was defaulted on.

If you've got an unsecured debt, there are a number of times when the creditor will accept negotiations, mainly because they have little other recourse. At least, there are few options that are financial sensible to pursue, especially when the borrower may ultimately not have the cash no matter how hard they are squeezed for it. How much they're willing to negotiate off what's owed will vary significantly depending on your situation and of course, the negotiations themselves.

As you might imagine, even if a lender is willing to co-operate they won't be enthusiastic about it; so having a competent negotiator work with them on your behalf can be a good idea.

Some types of debts that are commonly settled include:

• Credit card debts.
• Old service bills.
• Retail store credit.
• Personal loans.
• Medical and legal bills

Generally speaking, creditors will entertain proposals for most un-secured debts under the right circumstances. When concerned that they won't be able to get more than what’s being offered, they may elect to take what they can get.