Debt negotiation is an effective way of getting out of debt. It involves communicating with your creditors so they can accept your proposal to pay for only a portion of your debt and have the rest of it forgiven. Not all creditors will immediately agree to this. Most of them will probably give you a hard time at first. But if you know that it is possible and you use the right techniques, you may get the approval that you need. If everything goes well, you may find yourself out of debt in less than 4 years.
However, you need to make sure that you have the right debt first. Debt negotiation or debt settlement is only ideal for certain types of debts.
The best debt to apply this option to is your credit card debts. Card companies know that when it gets to bankruptcy, they will be on the least priority. That means, if you have mortgages, any liquidation coming from your personal assets will be sent to them first. The chances of the card companies getting anything is very low. This is why they will be more amenable to agree to your settlement offer. This is also true for other unsecured debts like those from store cards and personal loans that you have.
Secured loans like mortgages and car loans will not work because you cannot negotiate to settle without putting your collateral on the line. The best that you can do is to ask for a loan modification or a home refinancing. Debt consolidation may be the better debt relief option for you at this point.
For student loans, they are neither affected by bankruptcy or debt settlement so you really have no choice but to seek for government aid to get help. There are programs that will help reduce your loan amount - specifically the monthly payment dues. This way, it will be easier for you to meet your payments and spend for other important things in your life. If you are in a real financial crisis, you can even have your debt completely cancelled. But this is something that you need to be qualified for.
It is important to remember that all debt situations are unique and you cannot expect that all of them will be solved by debt settlement. But if you think that your credit problems can be dealt with through this option, then here are some tips that you may want to use.
First of all, keep mentioning that if your creditor will not lower your payments, you have no other option but to file for bankruptcy. If you are talking to credit card card companies, you know that they will be the first to be discharged so they will receive nothing from you. Settling will be their best option.
When you are negotiating for the amount that you will settle, aim for more than 50% off on your current balance. Or if you have a settlement fund set aside, aim much lower than that so you have enough room to negotiate without falling short.
Lastly, put everything in writing. There is no one else to do this but you. In case you come into an agreement, never send any payment unless the creditor sent you a written agreement that states everything that you discussed.
However, you need to make sure that you have the right debt first. Debt negotiation or debt settlement is only ideal for certain types of debts.
The best debt to apply this option to is your credit card debts. Card companies know that when it gets to bankruptcy, they will be on the least priority. That means, if you have mortgages, any liquidation coming from your personal assets will be sent to them first. The chances of the card companies getting anything is very low. This is why they will be more amenable to agree to your settlement offer. This is also true for other unsecured debts like those from store cards and personal loans that you have.
Secured loans like mortgages and car loans will not work because you cannot negotiate to settle without putting your collateral on the line. The best that you can do is to ask for a loan modification or a home refinancing. Debt consolidation may be the better debt relief option for you at this point.
For student loans, they are neither affected by bankruptcy or debt settlement so you really have no choice but to seek for government aid to get help. There are programs that will help reduce your loan amount - specifically the monthly payment dues. This way, it will be easier for you to meet your payments and spend for other important things in your life. If you are in a real financial crisis, you can even have your debt completely cancelled. But this is something that you need to be qualified for.
It is important to remember that all debt situations are unique and you cannot expect that all of them will be solved by debt settlement. But if you think that your credit problems can be dealt with through this option, then here are some tips that you may want to use.
First of all, keep mentioning that if your creditor will not lower your payments, you have no other option but to file for bankruptcy. If you are talking to credit card card companies, you know that they will be the first to be discharged so they will receive nothing from you. Settling will be their best option.
When you are negotiating for the amount that you will settle, aim for more than 50% off on your current balance. Or if you have a settlement fund set aside, aim much lower than that so you have enough room to negotiate without falling short.
Lastly, put everything in writing. There is no one else to do this but you. In case you come into an agreement, never send any payment unless the creditor sent you a written agreement that states everything that you discussed.
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