Article - Effective Debt Settlement
This past year has been exceedingly tough on American consumers
. With the slump in economy and rise in layoffs, many families have been struggling with financial challenges and thereby plunging deep in debt. However, despite the credit crisis, a number of opportunities still exist for individuals to take advantage of. With proper research and consultation, a consumer can get quickly started on the road to recovery and eventually go debt free. Some of the most common expenses that plunge consumers in debt are: Credit card bills Personal/Student loans Medical bills Bounced checks Luckily, all of those fall under the unsecured debt category meaning that there is nothing attached as collateral to the loan as repayment. Because of this creditors are more likely to work with a consumer to reach a settlement amount since there is no guarantee that they will receive anything from the consumer. Debt Settlement The Consumer Advantage A lot of people fail to see this, but it is very important to know that when it comes to debt settlement, the consumers are in charge. They have the natural advantage because they have something the creditors want - Money. More importantly, they are coming forth with the intention to pay some amount instead of ignoring them altogether. Settling Debt for Pennies on the Dollar This maybe sound too good to be true but numerous bad debt companies have successfully settled their debt with creditors for pennies on the dollar - literally. For debt settlement, consumers can always start off their offer with 25% or less and negotiate from there on with the debt collecting agencies. If they are dealing with the actual creditor itself such as a credit card company, things are fortunately much easier. Due to the current state of the economy, more and more credit card companies are willing to take 35%-50% of the balance as payments in full. There have even been cases of people being called up by such institutions instead and being offered this option. Some go a step further and offer monthly installment options. Therefore if your past due account is still in the hands of the original creditor, it would be a good option to give them a call directly and work things out. Help with Debt The Art of Negotiation The following tips are helpful when negotiating with a collection agency. Dont give the impression that you are eager to settle. Take your time to reach an agreement. Do not talk to collection agencies over the phone. All correspondence must be in writing. Get all your term of agreements in writing before you start writing checks. Keep a copy of every letter you send and receive as well as good records. Make sure to eliminate all late penalties and extra interest rate (mainly added to increase the profits of the debt collecting agency). Time is on your side. The longer a debt lays uncollected, the better the chances of a settlement. Start with accounts that are way past due. Since the consumer holds the upper hand, it is absolutely critical to take advantage of this benefit and not to let it slip away during debt settlement negotiations.
Article - Effective Debt Settlement
By: Mary
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