A clear look at the process before you decide.
Debt settlement may help resolve eligible unsecured debts for less than the full balance, but it comes with meaningful risks. Here is what the process can look like from your first review through your final resolved account.
We start by comparing potential paths and discussing whether debt settlement appears appropriate for your situation.
What is debt settlement?
Debt settlement is a process of negotiating with creditors to resolve eligible debts for an agreed amount that may be less than the current balance. It is generally designed for people experiencing financial hardship who cannot reasonably keep up with their current unsecured debt payments.
See how the process fits together.
This brief video provides an overview before you explore each step in greater detail below.
What the program can look like from beginning to end.
Every situation, creditor, settlement, and timeline is different. These steps explain the general structure rather than promising a particular outcome.
Understand your hardship and available options.
We begin by discussing your debts, income, expenses, goals, and what has made the current payment structure difficult. Before discussing enrollment, we compare other possible paths that may fit your circumstances.
Make deposits into a dedicated settlement account.
If you enroll, you make a recurring deposit based on the plan you reviewed. Those funds accumulate in an account intended for settlement payments. You retain ownership of the money in the account.
We seek settlement opportunities with creditors.
As sufficient funds become available and an account becomes eligible for negotiation, the team communicates with the creditor or collector to seek an available settlement offer. Timing and terms depend on the creditor and your account.
Review the terms before any settlement is accepted.
When a settlement offer becomes available, we present the proposed amount and payment schedule to you. You decide whether to approve it. A settlement is not accepted on your behalf without your authorization.
Approved payments are made from your account.
After approval, scheduled settlement payments are made from the dedicated account according to the agreement. You continue making your planned deposits while other enrolled accounts move through the process.
Resolve the final enrolled account and move forward.
The goal is to resolve each enrolled account that can be successfully settled using the funds available. After the final approved settlement is completed, regular program deposits end and remaining account funds belong to you.
You review each settlement before it moves forward.
A negotiated offer is not automatically accepted. We provide the terms so you can decide whether the settlement fits your available funds and broader plan.
Debt settlement is not the right fit for everyone.
Potential savings need to be considered alongside the possible consequences. We discuss these tradeoffs before enrollment so you can make an informed decision.
Credit impact
Missed and delinquent payments can negatively affect your credit reports and scores. The impact and recovery timeline vary by person.
Collection activity
Creditors and collectors may continue contacting you while accounts remain unpaid, subject to applicable law.
Potential lawsuits
A creditor or collector may file a lawsuit to collect a debt. Debt settlement does not prevent legal action.
Interest and late fees
Balances may continue to increase because of interest, late fees, or other charges allowed by the account agreement.
No guaranteed settlement
Creditors are not required to negotiate or accept a particular offer, and settlement amounts cannot be guaranteed.
Possible tax consequences
Forgiven debt may be treated as taxable income unless an exception or exclusion applies. Consult a qualified tax professional about your circumstances.
Debt settlement is only one possible path.
The appropriate option depends on your income, assets, debt types, hardship, credit goals, legal risk, and personal priorities.
Questions people often have about the process.
Debt settlement programs are generally intended for people experiencing hardship who are unable to maintain their existing unsecured debt payments. Settlement opportunities commonly arise after accounts become delinquent. Stopping payments can negatively affect credit, increase collection activity, add interest and fees, and create lawsuit risk. Review these consequences carefully before deciding.
There is no universal timeline. The timing depends on how quickly funds accumulate, creditor policies, account status, balance, legal activity, and available settlement terms. No specific settlement date can be guaranteed.
No. The settlement terms are presented to you for review, and your authorization is required before the proposed agreement is accepted.
Yes. Creditors and collectors may pursue legal action when debts remain unpaid. A lawsuit does not necessarily prevent negotiation, but it can change the available terms and should never be ignored. Consider speaking with a licensed attorney if you receive legal papers.
Debt settlement is not a credit-repair service. Delinquent payments and settled accounts may negatively affect credit. Some people begin rebuilding after resolving debts, but the timing and degree of improvement vary and cannot be guaranteed.
It can be. Bankruptcy may be faster, less expensive, or provide legal protections that debt settlement does not, depending on your circumstances. Ascend can help you compare general options, but legal advice and bankruptcy eligibility should be discussed with a qualified attorney.
Ascend’s fee generally ranges from 10% to 22% of enrolled debt. A fee associated with an enrolled account is earned only after a settlement is negotiated, you approve it, and the first payment under that settlement is made. Visit our Pricing page for more information.
Schedule a free consultation to review your debts, income, expenses, goals, and available alternatives. You are not required to enroll.
Understand every option before choosing one.
Schedule a free conversation to compare possible paths, understand the tradeoffs, and decide what makes sense for your financial situation.