Debt settlement is the process of hiring a company to negotiate with your creditors in order to reduce the total amount of money that is owed.
The remaining debt can then be paid back either in one lump sum, or slowly over the course of a year or more.
Debt settlement is unique among the many different forms of debt relief because it involves the lenders directly in the process.
The terms of the settlement rely heavily upon their willingness to work with the agency that represents you and their willingness to take a loss on the money you owe.
The counselor who will be working on your behalf will need to take your entire financial situation into consideration in order to come up with a plan that will actually succeed and not just delay an eventual bankruptcy.
Assets that you own will be calculated into the figures.
Owning a home, or not owning a home, really makes little difference in the case of seeking a negotiated settlement.
In fact, it may actually be more favorable to not have an asset like a home.
This is because, should the lender not wish to settle, they will not be able to acquire a judgment to place a lien on the property.
Unlike debt consolidation which relies on issuing a loan, a settlement company does not directly deal with money as it moves between the client and the lender.
So, having assets is not necessary to use the service.
Of course, assets that can be sold, like a second car, are helpful in order to raise the money needed to speed up repayment, but are not necessary.
Debt settlement is one of the most effective ways to take control of a bad financial situation.