If you are receiving unsolicited phone calls from an entity pretending to be ACCC (a trusted non-profit credit counseling agency), please be assured that ACCC’s policy is NEVER to contact you unless you’ve explicitly requested for us to call you.

×

ACCC’s Client Login allows current clients to access their program information, including the due date, program benefits, and other documents.

Select a Client Login below based on the service that you are currently enrolled in:

Debt Management Program

Client Login

Bankruptcy

Pre-Bankruptcy Client

Post-Bankruptcy Client

Not yet a client, but looking to get started?

ACCC offers debt relief options to individuals and families that are suffering from stress related to credit card debt by providing effective credit counseling, helping to consolidate debt, and advising on debt management.

Get Started

Wait!

You are now leaving the Consumer Credit website and are going to a website that is not operated by ACCC. We are not responsible for the content or availability of linked sites.

Are you sure you want to leave?

No, return me to the previous page.

Yes

What is Debt Settlement

For anyone who is deeply in debt and having trouble seeing their way out of it, a debt settlement program can seem very attractive. Settlement companies regularly advertise that they can help you reduce your debt from tens of thousands of dollars to just a couple hundred bucks. But what is debt settlement, exactly? And does it live up to the hype in reality? Here’s a quick introduction to “What is debt settlement?” that provides some answers and looks at the pros and cons of debt settlement.

What is debt settlement?

Debt settlement, or credit settlement, is a strategy for getting relief from a large amount of debt. When you enter a debt settlement program, you will stop making monthly payments to your creditors, and put the money you would have paid into a savings fund with a US debt settlement service. After a period of time, when your accounts are quite overdue, the settlement agency will contact your creditors and offer a lump sum payment to settle your debt. The theory behind debt settlement is that creditors are likely to accept the settlement offer if they are worried that you might otherwise not be able to pay anything on your debt.

What is debt settlement designed to do?

Debt settlement is intended to erase your debt with creditors for a sum that is ideally significantly less than what you owe. While companies advertise settlements of a fraction of what consumers owe, in practice, most settlements are between 25% and 80% of the amount owed.

What is debt settlement biggest benefit?

The greatest advantage of debt settlement is that your debt can be erased at a cost that is significantly less than the amount you owed.

What is debt settlement’s impact on credit scores?

Debt settlement will inevitably have a serious and negative impact on your credit scores since you must stop making payments to your creditors for a number of months and since you are unable to completely fulfill your original debt obligations.

What is debt settlement versus bankruptcy?

When considering the impact of debt settlement vs bankruptcy, credit scores are typically more heavily impacted by bankruptcy than settlement. When resolving financial issues, bankruptcy is considered the last resort.

What is debt settlement versus consolidation?

Debt consolidation is a strategy for simplifying your finances and reducing the interest rate on loans and debt. It will not help you reduce your debt as quickly as debt settlement, but it will also not significantly impact your credit score.

What is debt settlement versus debt management?

Debt management is another strategy for paying down your debt that does not require you to stop making payments to creditors. Under a debt management program, it may take up to 60 months to pay off your debts, but your credit rating will not take a significant hit.

To learn more about the pros and cons of debt management, debt management, and bankruptcy, contact American Consumer Credit Counseling for a free credit counseling session.

See if our Debt Management Program is right for you Should you consolidate your debt? See how much it really costs to use your credit cards
Dev Tool:

Request: what-is-debt-settlement
Matched Rewrite Rule: ([^/]+)(?:/([0-9]+))?/?$
Matched Rewrite Query: name=what-is-debt-settlement&page=
Loaded Template: single-resource-pages.php