Debt Settlement

LET THE NEGOTIATIONS BEGIN WHO TO CONTACT? If your account is seriously delinquent you may have already been contacted by the original creditor. You may begin the negotiations with the representative calling you, or you may initiate the negotiations by calling the original creditor. Call the customer service department at the 1-800 telephone number on your statements and on the back of the credit card. Inform them of your hardship. Keep it simple and direct. You should be aware that they are taking notes, which will be made part of your account records permanently. If you find the collector is rude and unwilling to help you, do not argue and never use profane language. Ask to speak to a supervisor or department manager and proceed when that person is on the phone. WHAT TO SAY Express an interest to settle the debt, but do not make a proposal. If they are interested they may propose an offer immediately. WHAT TO EXPECT FROM THE CREDITOR • Their first offer might be to reduce or eliminate interest. • They may offer a “Hardship Plan.” Typically, this means the creditor will agree to waive any penalties or late fees for six months and to lower your interest rate. Professionals in the business do not consider this a good proposal. • A common proposal made by creditors is to eliminate all interest, late fees, over-the limit fees, etc. If that offer is proposed, you could counter by proposing a settlement of 60% because experts calculate those fees to represent 30% to 40% of the debt. • Another common proposal made by creditors is a principal reduction of 25% to 40%. MUST I ACCEPT THE PROPOSAL FROM THE CREDITOR? Do not be intimidated. You are not obligated to accept the proposal. Odds are they will make a better offer at a later date. It is their intention to collect as much of the debt as possible. Remember, creditors do not want an account to go to a collection agency because the collection agency will receive fees for funds collected. Also, if you declare bankruptcy they will receive nothing. They are afraid of this. Remember, you are not required to answer any questions they may ask regarding your intentions to file bankruptcy. Keep them guessing!! HOW DO I REFUSE A PROPOSAL? If the offer is not acceptable, tell them you must give it some thought and will get back to them. Before ending the conversation be certain you have the representative’s first and last names, the direct telephone number, fax number, and mailing address. DO NOT END THE CONVERSATION WITHOUT THIS INFORMATION!!!CAN I MAKE A COUNTER PROPOSAL AND HOW MUCH SHOULD I PROPOSE? You have obtained the mailing address of the creditor’s representative. Therefore, you can submit a written proposal at any time, directly to that person. However, they will probably contact you with another verbal offer before you submit your written counter proposal. Remember, you may accept their proposal at any time you are in agreement, and you may also continue to counter propose an offer until you have reached an agreement. Keep one thing in mind – 30% to 50% of the original balance is an excellent settlement, and you should consider accepting it. THIS HAS BEEN A SAMPLE SEGMENT OF OUR DO IT YOURSELF GUIDE.