To manage an overwhelming debt load and make your payments more affordable, you may have to resort to debt settlement. There are a number of steps you can take to settle a debt. Some are more structured than others. When you decide to settle a debt, always examine all possibilities for comparison. Make sure you choose the route that helps you eliminate debt effectively and efficiently.
Review
After deciding that a debt settlement is for you, make a list of all the things that matter, such as an ideal balance, interest rate, monthly payment, terms for repayment and the effect on your credit report. Be prepared to negotiate all of the terms and agreements. Decide if you want to pay monthly or if you have a lump sum of money you would like to pay.
Offer
Debt settlement is for those who have run into a problem with debt. If you can comfortably afford to pay your debts on time, then debt settlement is not for you. Unemployed people with a limited income are often prime candidates for settlement. Call your creditors and let them know your situation. They will probably offer several solutions, including a settlement offer. Once a settlement is made by the lending institution, you should make a counteroffer. They may try to make another offer and you may want to do the same. Let the debt collector know you want to think about it. Chances they will accept your offer.
Debt Relief Company
You can have your debts settled by a debt relief company that helps consumers who have gotten into trouble with unsecured debt. It can help you reorganize and reschedule your debt with creditors. Debt reliefe companies handle the entire process. Many consumers have been able to reduce their debt substantially by settling for 50 cents on the dollar. Settlements can be a lump sum or monthly payments.
Consumer Credit Counseling
When you work with consumer credit counseling services you have another opportunity to settle your debt. Joining their debt management program allows you to pay one lump sum through the program, which then disburses funds to your creditors monthly. You receive lower interest rates and lower monthly payments in the process.
Collection Agencies
A settlement offer can be made no matter what stage you have reached with your debts. You can contact a collection agency or attorney representing a creditor and offer a cash settlement. They will be anxious to receive the settlement on behalf of their client. You may be able to negotiate favorable terms. Settlements can lower your credit score. Most creditors will report this information to the credit reporting agencies. The information will remain on your file for seven years.
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