Tips on Settling Debt

Debt can be a very pressing issue for many people. Owing a ton of money to credit card companies or banks can put a damper on anything else you have going on in your life and settling such debt can alleviate a lot of personal stress. There are several creditors that offer loans and other debt relief programs and there are several tips you can use that may make things a little less painful along the way.

Offer Less

Debt collectors offer plans that will pay off all your debts and close your accounts, resulting in you having to pay off a fixed sum of money every month. A debt collector will decide how much you have to pay usually based on how much you can pay. When negotiating with a debt collector, figure out how much you can pay, then offer less to the collector. Even if the collector disagrees and makes your payments higher than you offered, you still should have enough to cover it.

Spend What You Have

When paying a debt settlement plan, don't pay with money you don't have by offering postdated checks or agreeing to automatic deductions from your checking account. If you do, and then it turns out you don't have the money in your account, not only will the check be bad and your payment not made, but you may be slapped with insufficient funds fees and other penalties from your bank.

Don't Give Out Private Information

When talking to a debt collector, don't give out personal information that he or she may be able to use against you, like your checking account number, your place of business or your bank.

Keep Records

Keep records of all bills and letters from the debt collection company and even keep records of all of their phone calls, including the dates and times, the name of the collector and everything he said. Documenting everything can be very important and can act as proof of deals made with debt collectors.

Wait Until the End of the Month

Most debt collectors work off commission on a monthly basis. By negotiating at the end of the month, collectors may be more anxious to make deals that will go toward their monthly quota, which could land you a very good deal.

Debt Settlement is the Last Resort

Remember to only use debt settlement if it is the only option available other than bankruptcy. It, like bankruptcy, will go on your record and possibly keep you from getting loans in the future.