How to Find Legal Debt Settlements

If your debts far outweigh your monthly income, you are a strong candidate for debt settlement. A certified debt management credit counselor can review your financial records and create a custom debt settlement plan that works for your budget. Credit counselors can communicate with creditors on your behalf and guide you through the debt settlement process. Debt settlement is a legal agreement whereby a creditor accepts a lesser value for a debt.

Instructions

1

Notify creditors of your intention to seek credit protection under bankruptcy court law. Expressing an interest in bankruptcy protection may provide leverage during negotiations. Explain that you will seek credit counseling in the interim to pursue alternative options. Do not discuss debt settlement at this time.

2

Contact a certified debt management credit counselor. Credit counseling associations provide public resources such as a member directory and credit counselor locator tools.

3

Do your research. Before hiring a debt management credit counselor to settle bad debts, request the company's performance record. Avoid companies that boast a 100 percent settlement record. Such figures are rarely possible.

4

Sit down with the debt management credit counselor and evaluate the debt relief options that are available to you. Inquire if a settlement is the best option for reducing debts at the lowest cost.

5

Develop a personalized plan for settling your delinquent lines of credit. Provide your credit counselor with an itemized breakdown of your expenses, liabilities and debts, so you and your counselor can arrive at an affordable settlement offer.

6

Have your credit counselor request a settlement agreement in writing. Review the agreement with your credit counselor. Sign and date the agreement and then return. Make your lump sum settlement payment as agreed.