If you’re like thousands of Americans who are struggling to
pay bills under the vice-like grip of the credit crunch, don’t lose hope,
you’re not alone. There are alternatives to getting out of debt- and quickly.
Many have chosen to settle their debt; this occurs when a creditor negotiates
and “settles” for a specific amount that is lower, usually significantly lower,
than the actual amount owed. If this sounds like a viable option for you,
consider these tips before settling your debt.
Seeing Green
Creditors can often negotiate up to 60% of your debts owed,
saving you thousands of hard-earned
dollars. However, in order to have the most bargaining power, debt settlement
is recommended for those middle-of-the-road debtors. What does that mean for
you? If you’re in significant amounts of debt, you may want to consider other
debt consolidation means, such as filing for personal bankruptcy. Or, if you’ve
just accumulated a small bit of debt, call a lending company directly to
discuss your options.
Stick to Facts
When talking with a tough debt collection agent, you may be
nervous, or downright scared. Before you call, write down everything that is necessary for the collector to know;
leave the tale of woe behind. This way, you’ll stay focused on what matters:
the facts. Prioritize your bills, starting with necessities for your family
such as food, clothing, and insurance costs, and then include extras like
credit cards. Next, calculate what you can afford to pay on a monthly basis.
When you are discussing what you can afford, try to offer less. After you’ve
written everything down, make the call.
Slow & Steady
Don’t let the smooth talking get to you; stay focused on
your goal: settling your debt for a smaller, affordable repayment plan. Words
like “rush”, “immediate” and “one-time only” should raise a flag in your mind; do
not take any action until you have a written agreement of the terms in your
hands. By following this rule, you’ll weed out fraudulent debt settlement
companies and have time to discuss the terms of agreement with your family
prior to signing.