Effective Financial

The Truth About Debt Settlement Percentages

Settlement PercentageSETTLEMENT PERCENTAGES AND WHAT TO EXPECT. I’ve been in the debt negotiation industry since 1998 and have worked with one of the premier debt negotiators, Paul Killmar so I am well acquainted with the debt industry and what to expect from the negotiator. The truth is, the settlement percentage that is the industry standard runs between 43% and 45% of what is owed.  That is the average settlement percentage.

Now, you will get these incredible settlements where the percentage is 7%, which was one we got for a $35,000 debt, but those are very, very rare.


Part of the settlement percentages have to do with the cash-flow needs of the banks and credit card companies.  If they are cash light, they may be willing to settle for a lesser percentage.  For instance, Citibank is having a hard time and they are now more willing to settle credit card debt for about 20% less than they had before.

MBNA use to give good settlement percentages, then in 1999, they settled for around 60%, but more recently, they have lowered their settlement percentages to around 40%.


I give you this information so you know ahead of time what to believe from the sales person.  Sometimes, it is popular to talk about the 1 credit card that settled for a very low amount and act like that is the norm of the banks and credit card companies.  It is not.

Just beware of the eager sales person and know ahead of time what is true and what isn’t.  Then, you can better judge the Debt Negotiation company.

I’ll bet that there are some of you who would like to see something a little more specific.  And, I believe I have just what you’re looking for.  I have posted samples of real settlement letters from actual settlements we’ve recently done for our clients.  (Only the names have been changed to protect the innocent.)

To see them,CLICK HERE.