Debt Settlement Calculator
Use this calculator to estimate the potential costs, savings, and timeline involved in a debt settlement program. Understand how negotiating your debt can impact your financial future.
Settlement Estimates:
Enter your details and click "Calculate Settlement" to see your results.
function calculateDebtSettlement() {
var totalDebtOwed = parseFloat(document.getElementById('totalDebtOwed').value);
var negotiatedSettlementPercentage = parseFloat(document.getElementById('negotiatedSettlementPercentage').value);
var companyFeePercentage = parseFloat(document.getElementById('companyFeePercentage').value);
var monthlyPaymentToProgram = parseFloat(document.getElementById('monthlyPaymentToProgram').value);
var resultsDiv = document.getElementById('settlementResults');
if (isNaN(totalDebtOwed) || isNaN(negotiatedSettlementPercentage) || isNaN(companyFeePercentage) || isNaN(monthlyPaymentToProgram) ||
totalDebtOwed <= 0 || negotiatedSettlementPercentage 100 || monthlyPaymentToProgram <= 0) {
resultsDiv.innerHTML = 'Please enter valid positive numbers for all fields. Negotiated Settlement Percentage must be between 1% and 100%.';
return;
}
if (companyFeePercentage 30) {
resultsDiv.innerHTML = 'Debt Settlement Company Fee should be between 0% and 30%.';
return;
}
var totalSettledAmount = totalDebtOwed * (negotiatedSettlementPercentage / 100);
var totalCompanyFees = totalSettledAmount * (companyFeePercentage / 100);
var totalCostOfSettlementProgram = totalSettledAmount + totalCompanyFees;
var totalSavings = totalDebtOwed – totalCostOfSettlementProgram;
var estimatedTimeToSettleMonths = totalCostOfSettlementProgram / monthlyPaymentToProgram;
resultsDiv.innerHTML =
'
Total Settled Amount: $' + totalSettledAmount.toFixed(2) + " +
'
Total Debt Settlement Company Fees: $' + totalCompanyFees.toFixed(2) + " +
'
Total Cost of Settlement Program: $' + totalCostOfSettlementProgram.toFixed(2) + " +
'
Total Potential Savings: $' + totalSavings.toFixed(2) + " +
'
Estimated Time to Settle: ' + estimatedTimeToSettleMonths.toFixed(1) + ' months';
}
.debt-settlement-calculator-container {
font-family: 'Segoe UI', Tahoma, Geneva, Verdana, sans-serif;
background-color: #f9f9f9;
padding: 25px;
border-radius: 10px;
box-shadow: 0 4px 12px rgba(0, 0, 0, 0.1);
max-width: 600px;
margin: 30px auto;
border: 1px solid #e0e0e0;
}
.debt-settlement-calculator-container h2 {
color: #2c3e50;
text-align: center;
margin-bottom: 20px;
font-size: 28px;
}
.debt-settlement-calculator-container p {
color: #555;
line-height: 1.6;
margin-bottom: 15px;
}
.calculator-form .form-group {
margin-bottom: 18px;
}
.calculator-form label {
display: block;
margin-bottom: 8px;
color: #34495e;
font-weight: bold;
font-size: 15px;
}
.calculator-form input[type="number"] {
width: calc(100% – 20px);
padding: 12px;
border: 1px solid #ccc;
border-radius: 6px;
font-size: 16px;
box-sizing: border-box;
transition: border-color 0.3s ease;
}
.calculator-form input[type="number"]:focus {
border-color: #007bff;
outline: none;
box-shadow: 0 0 5px rgba(0, 123, 255, 0.2);
}
.calculator-form button {
display: block;
width: 100%;
padding: 14px;
background-color: #28a745;
color: white;
border: none;
border-radius: 6px;
font-size: 18px;
font-weight: bold;
cursor: pointer;
transition: background-color 0.3s ease, transform 0.2s ease;
margin-top: 25px;
}
.calculator-form button:hover {
background-color: #218838;
transform: translateY(-2px);
}
.calculator-form button:active {
transform: translateY(0);
}
.calculator-results {
background-color: #e9f7ef;
border: 1px solid #d4edda;
border-radius: 8px;
padding: 20px;
margin-top: 30px;
}
.calculator-results h3 {
color: #28a745;
margin-top: 0;
margin-bottom: 15px;
font-size: 22px;
text-align: center;
}
.calculator-results p {
margin-bottom: 10px;
font-size: 16px;
color: #333;
}
.calculator-results p strong {
color: #2c3e50;
}
Understanding Debt Settlement
Debt settlement is a process where you negotiate with your creditors to pay a lump sum that is less than the total amount you originally owed. This can be an attractive option for individuals facing significant financial hardship and struggling to keep up with their debt payments, especially on unsecured debts like credit cards, personal loans, and medical bills.
How Debt Settlement Works
- Accumulating Funds: Typically, you stop making payments directly to your creditors and instead deposit a monthly amount into a special savings account managed by a debt settlement company. This fund is built up over time to be used for the eventual lump-sum settlement offers.
- Negotiation: The debt settlement company then negotiates with your creditors on your behalf. Their goal is to convince creditors to accept a lower amount than what is owed, often citing your financial distress. Creditors may agree to this to avoid the risk of you filing for bankruptcy and potentially receiving nothing.
- Settlement: Once a settlement is reached, the lump sum from your dedicated savings account is paid to the creditor. This process is repeated for each debt you include in the program.
Key Considerations for Debt Settlement
- Impact on Credit Score: Debt settlement can severely damage your credit score. Accounts will likely be marked as "settled for less than the full amount" or "charged off," which remains on your credit report for up to seven years.
- Fees: Debt settlement companies charge fees for their services, typically a percentage of the settled amount or the original debt. These fees are factored into the total cost of the program.
- Tax Implications: The amount of debt forgiven through settlement might be considered taxable income by the IRS. It's crucial to consult with a tax professional.
- Creditor Actions: While in a debt settlement program, creditors may continue collection efforts, including phone calls, letters, and potentially lawsuits, until a settlement is reached.
- Timeframe: Debt settlement programs can take several months to a few years to complete, depending on the amount of debt and your ability to save.
Is Debt Settlement Right for You?
Debt settlement is generally considered a last resort before bankruptcy. It's most suitable for individuals with a significant amount of unsecured debt who are severely delinquent or on the verge of default, and who have exhausted other options like debt consolidation or credit counseling. Always weigh the pros and cons carefully and consider seeking advice from a certified financial counselor.
Our Debt Settlement Calculator helps you estimate the financial aspects of such a program, including potential savings, total costs, and the estimated time it might take to become debt-free through settlement.