Wednesday, November 15, 2006

A Creditor Is Not Responding to a Debt Settlement Letter

Escaping the crushing weight of debt can be a challenge that requires planning and organization. One option is attempting to settle your debts with your creditors by negotiating new terms. While there is no guarantee that a creditor will be receptive to a settlement proposal, nothing prevents you from trying.

Requirements

    There is no legal requirement that your creditors renegotiate the terms of your debt or enter into a debt settlement agreement. Your ability to settle your debt is based entirely on you and your creditor's willingness to enter into a new agreement. If either party is unwilling to do this, a debt settlement is not possible. The only option in this situation is for you to either pay your debts or go through the collection process, which could include a lawsuit.

Communications

    When you try to settle or renegotiate a debt, you can initiate contact with your creditors at any time and in any method you choose. If writing a debt settlement proposal letter does not receive a favorable response initially, you can try other methods. For example, you can call the creditor and ask for an account manager or other person who has the ability to negotiate a settlement. You can also write a new letter with new terms and address it to a different representative of the company.

New Proposal

    If your creditor doesn't respond to your initial proposal for a debt settlement, you may need to reevaluate your terms. Start by evaluating your current financial situation to determine your total amount of debt as well as your ability to pay. Once you know how much you are able to pay and can give your creditor concrete information about your financial position, your creditor may be more willing to negotiate a settlement, especially if it appears that suing you will not result in repayment.

Debt Validation

    When a creditor contacts you in an attempt to collect on an unpaid debt, the creditor is obligated to act under the terms of the Fair Debt Collection Practices Act. This law requires that the creditor provide you with a debt validation document that details the debt the creditor believes you owe. You have the right to challenge this debt in writing by sending a dispute letter to the creditor. Once you do this, the creditor must send you verification of the original debt within 30 days. However, this does not require the creditor to renegotiate or settle the debt with you.

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