Debt settlement or loan settlement programs are administered to enhance profitability. When you settle the debts, you pay less amount than what you owe.

When you begin the plan, you are already behind the debts. Therefore, the settlement company asks to save a particular amount. It also asks to stop the payments during the negotiation process.

You put yourself purposely in default. The objective of a loan settlement or debt settlement process is to save sufficient cash to pay the amount in full when the settlement amount is reached.

Once you make the payment, your account no longer remains a default account. It is considered satisfied.

How will you work with the debt settlement agency?


  • To safeguard your company from getting into npa in india; it is essential to know how much you owe? The next thing is to make a list of debit and credit balances.
  • Now make an offer to every creditor. You can negotiate debts down to less than 50 percent of the total balance you owe. Usually, creditors do not reply to the offer for two months or three months after missing the payment.
  • Once you agree with each creditor on the amount to be repaid, you should ask for the agreeent in black and white. If required, you can seek the help of legal services to draft the document.
  • You should be ready to have money for the lump-sum settlement. When a creditor is ready to accept half of the amount, then it is essential that you have that much money in hand.
  • You have to pay the settlement and ask a letter to confirm that the debt has been satisfied. You should get the letter from each creditor to tell your payment.
  • The letter is signed by the authorization agent of the creditor. The wordings should clearly say that you do not owe anything on debts on the account.


Thus, it is clear that the process of debt and loan settlement is quite simple and easy. The only thing you need is to go in a structured and systematic manner.