Negotiating With Creditors for Easy Debt Settlement

Easy Debt Settlement

Debt settlement process involves the debtor negotiating with creditors to reduce the balance they carry. Negotiating can help you to solve the problems. It basically involves that your creditors to accept the partial debt amount only out of total debt you owed. You can solve your own debts with the following steps.

First thing is to assess your financial status. List all the creditors, amount you owed and the amount you have to pay back. Then prioritize the bills and make it order which bill amount should be paid first that with highest interest. Get your credit reports and cross check with your collected details whether the information’s are accurate. Look whether your creditor has turned your account balance over to a collection agency.

Collectors will try to get more money from you as possible and will not accept lower settlement that you were not agreed. When your account is delinquent, the collector will consider the settlement. But its doubt only, the collector will accept settlement even though when you stop paying (no guarantee). But your credit score will result badly. To handle this situation better, you can contact the company and let them know that you cannot settle the payments regularly. So this will encourage the company to come forward to negotiate. Before negotiating with creditors, prepare yourself what you are going to talk and reasons on your side.

And also estimate at what percentage of debts you can able to pay and the maximum amount you can pay. It can be done on monthly basis or lump sum amount. When negotiating, it always good to start with lowest offer. But anyway this won’t be granted by your creditor, but it will set a situation that you were unable to pay. Your negotiation should be polite, honest, calm and with clear sentences while communicating with company creditor. If they refuse to settle you can talk for their best interest and it’s good to receive certain percent of many than nothing else. It’s very common for the collectors to settle 40% or 60% of the total debt.

Finalization of Terms and Starting To Pay Debts

As soon as agreement is settled, receive a written copy of the terms from them immediately. And don’t pay till you receive the agreement from the company. Avoid giving your credit card and bank account information’s to your creditor and its best to pay off your debts by money orders. Know your rights at this last final stage. The National Consumer Law Center, Federal Trade Commission or your local government offices will provide information’s regarding what debt collectors can and cannot do.

Review and Follow the Fair Debt Collection Practice Act. Keep a record of the all payments and communication with your creditors along with dates. Check monthly credit reports and simultaneously follow the accounts and creditors to ensure the process is running smoothly. Overwhelming debt settlement may seem to be challenging but you have to be aware for paying debts and to avoid it in near future.

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