It's difficult to accept the fact that you're in debt. It may seem all the more difficult to negotiate with debt collectors, especially if you fear the scare tactics often used by them. You can work with professionals in order to settle your debt. However, it is not that intimidating to follow a few steps and bring down the outstanding balance on your own.
DIY or do it yourself debt settlement makes sense because:
Several professional companies have gained bad reputation in the last few years because of the following reasons:
Apart from the above mentioned reasons, there is one more reason why it is better to go for do-it -yourself debt settlement.
You can settle debts on your own in the following ways:
You need to have at least the basic knowledge about your debt situation for initiating the negotiation process. You can gain the basic knowledge from your credit report and the available balance in your checking account.
You'll need to go through all the financial documents. Have the basic idea about what debt settlement is, what your creditors or collectors can or can't do during negotiations, how various actions may make it easy for you to negotiate with creditors and get back your financial freedom fast.
Decide the maximum amount you can pay on each account. This will be extremely helpful when you start the negotiation process.
It'd be a mistake to create only one settlement plan. Create a few backup plans too. If the plan A doesn't work, then use the plan B. Consider some other debt relief plans too.
If your creditor is not happy with the offer, then make a counter-settlement offer soon. Let the creditor know that you're contemplating bankruptcy if all the options to settle debts are closed.
Making payments to your creditors basically indicate that your financial situation is good. They'll think that you can afford to pay off the debt.
If you want your creditors take your settlement offer seriously, then what you need to do is stop making payments on the delinquent accounts. Save that amount in an account. You need to save a sizeable amount in order to make reasonable settlement offer.
Don't think that creditors will accept your very first settlement offer. Your starting bid should be low as creditors are most likely going to counter it.
If the creditors accept your first offer, then you'll certainly get a very good deal. Make sure you don't make a too low bid as creditors may reject your settlement offer altogether.
A lot of times, debtors are forced by creditors to accept an offer that is beyond their affordability. Try to avoid succumbing to pressure for it won't be good for your financial health. On the other hand, find out your chances of getting sued by the creditors. Make a decision on the basis of that.
Once you've had a final discussion with creditors, get a written agreement from them wherein the terms and conditions of settlement are clearly written. Check if the payment date and the settlement amount are clearly stated in the agreement.
Here are the few tips that you can use to settle debts with creditors.
Last but not the least, do remember at least 3 things about debt settlement.