Debt Settlement Tops, Study Finds

Debt Settlement offers the most of any debt relief service, a study finds.

The study, conducted by Southern Methodist University professor Richard Breisch, says debt settlement provides the greatest value among the several types of debt relief programs. Debt settlement accomplishes its aims by attacking the principal on the debt.  

“However, the consumer welfare analysis suggests that DSPs create the greatest consumer welfare of any approach,” the study concludes.

The study finds good success rates for those who participate in debt settlement programs. In addition, the debt settlement provider creates a higher value for high dollar debt, the study says. The report advocates more transparency and information for consumers, monthly savings requirement, various account protections, and require financial education for the consumer.

The survey was put together at the request of the Americans for Consumer Credit, an organization that advocates for more free market solutions in the credit industry on behalf of providers of consumer products.