There are two ways to informally settle debts: by personally contacting creditors and offering a settlement, or hiring a credit or debt counselling company to settle the debts for you.
Arranging The Settlement Yourself
An informal settlement involves contacting creditors directly and offering them a lesser amount to settle the total outstanding debt. This can work when you have just one or two creditors and you have the money to pay them immediately. Challenges can include:
- finding the initial sum of money to pay down the debts
- getting all creditors to agree to the settlement