How to Write Off Unsecured Debt

Writing off unsecured debt is not good for your credit health and affects your credit rating. When you stop paying your debts and your credit rating goes down, it is difficult if not impossible to get a loan or a mortgage for six or seven years.

Instructions

Instructions

1

Assess your situation and obtain help from one of the consumer credit agencies if you need it. Make a list of all your incoming and fixed outgoing debts, such as rent or mortgage, utility bills, food and clothing and health insurance.

2

Print out or obtain copies of credit card and loan statements for the last three to six months. Call your creditors and ask what they can offer you. If no agreement is reached with your creditors, you could stop payment altogether. If you default for 90 days, your creditors may present you with an offer to settle what you owe at a lower amount -- or they may take legal action against you. (See reference1.)

3

Seek professional advice. Debt counselors may offer to negotiate with your creditors to reduce or stop interest payments and accept a fixed sum each month based on your budget.

4

Find out the statute of limitations on unsecured debt in your state. Creditors cannot collect on debts that are more than five years old. Writing off debts in this way will affect your credit rating for up to seven years.