Although attorneys and debt settlement and negotiation companies are options for working with your creditors, you also can negotiate and settle on your own. This typically is a good option if your debt situation is uncomplicated, and you feel confident in your knowledge of your rights. Following a few tips in do-it-yourself negotiation and settlement may help you get the result you want.
Statute of Limitations
Laws regarding debt collection vary by state, but every state has a statute of limitations for how long a creditor can collect a bad debt. If the statute of limitations has expired for your state, you do not have to pay the debt, although some creditors still try to collect. Always check to see what debts you truly have to pay before you start contacting your creditors. Inform the creditors with whom you have expired debt that they legally cannot collect to put an end to hassling.
Credit Score and Report
Before you negotiate, get a free copy of your credit report and score from each of the three major credit bureaus: TransUnion, Equifax and Experian. Debt settlement and negotiation can cause your credit score to drop, at least initially. You should know what your credit score is so you know approximately where a drop in your score may place you. The copy of your credit report also will show you what debts have given your credit score the most dings, which may influence the order in which you attempt to settle or negotiate.
Research and Specifics
Every creditor has a history of debt negotiation and settlement, or they are aware of what other creditors are able to offer in settlement and negotiation. Write or call your creditors and ask to speak to someone in the debt collections or customer service department. Then ask about previous negotiations and settlements--for example, ask what percent of the principal balance the creditor has taken in previous settlements. Base your settlement and negotiations on their information. When you write your settlement and negotiation communication, show you've done your homework: Quote the specific figures representatives provided to you, along with the representatives' names and the dates of communication. The idea is to show the creditor has accepted similar offers in the past. Offer a specific percentage and be clear about how and when you will pay the remainder of your balance. Provide documentation that supports your plan.
Written Communication
Always conduct all of your negotiations with a creditor in writing. Written communications make it easier to clear up miscommunications. They also give you evidence of what has transpired, which you can take into a court of law if necessary.
Extra Fees and Charges
Creditors often tack on fees and charges when you are late on payments. These payments generally aren't as much as your total principal. Start your negotiations by asking your creditor to forgive the extra fees and charges they've added. In some cases, this can make payment on the total debt more manageable, and many creditors are willing to waive fees if it means they get at least most of what you owe.
Civility
When you negotiate, be as polite as possible. The more professionally you conduct yourself, the more likely it is that the creditor won't be inflamed by something you say and deny your settlement or negotiation request.
0 comments:
Post a Comment