The Truth About Debt Settlement - What it Really Does | Summary and Q&A

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February 4, 2020
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Debt Free Millennials
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The Truth About Debt Settlement - What it Really Does

TL;DR

Debt settlement is a process in which a third-party company negotiates with creditors to settle your debt for less than you owe, but it can negatively impact your credit score.

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Key Insights

  • 👻 Debt settlement involves negotiating with creditors to pay off your debt for less than what you owe.
  • 💳 Unsecured debts, such as credit card debt and medical bills, can be settled through debt settlement.
  • 🤑 Debt settlement requires you to stop making payments to your creditors and instead deposit money into a special account.
  • 💯 Debt settlement can have a negative impact on your credit score.
  • ❓ There is no guarantee of successful negotiations or debt settlement.
  • 🈂️ Additional fees may be charged by debt settlement companies for their services.
  • ❓ It is important to be cautious of disreputable debt settlement companies.

Transcript

okay you've heard about debt settlement right and you know what they do we need to talk about debt settlement hey guys it's Justine with debt-free Millennials the channel to help you crush yo debt and live a debt-free life if you want to learn how to live debt-free click to subscribe today I'm gonna be talking about debt settlement I'm sure you've ... Read More

Questions & Answers

Q: What is debt settlement and how does it work?

Debt settlement is a process where a third-party company negotiates with creditors to settle your debt for a lesser amount. It works by having you stop paying your creditors and depositing money into a special account, which the debt settlement company will then use to negotiate a payoff with your creditors.

Q: What types of debt can be settled through debt settlement?

Debt settlement can be used for unsecured debt, such as credit card debt and medical bills. It cannot be used for student loan debt, as you will still be required to repay those loans.

Q: What are the pros of debt settlement?

The pros of debt settlement include paying less than what you owe on your debt and having a third-party handle negotiations with your creditors on your behalf.

Q: What are the cons of debt settlement?

The cons of debt settlement include the negative impact it has on your credit score, the lack of guarantee of successful negotiations, the potential for additional fees, and the presence of disreputable debt settlement companies.

Summary & Key Takeaways

  • Debt settlement is a debt relief method where a third-party company negotiates with creditors to settle your debt for less than what you owe.

  • It can be used for unsecured debts like credit card debt and medical bills, but not for student loans.

  • To initiate debt settlement, you must stop making payments to your creditors and instead make payments into a special bank account set up by the debt settlement company.

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