Debt settlement or debt negotiation is the process of striking a deal with your creditor so that you can pay a reduced part of your outstanding balance or extend the period of repayment.
Negotiating debt settlement is never a pleasant task for anyone, but it can be a lot less stressful if you work with your creditors in a way that can bring about positive solutions.
There are certain debt negotiation principles that you need to follow, if you want to negotiate debt settlements yourself and not using a debt negotiation service. This way can help you control your financial situation before it’s too late.
Preparing for a Debt Settlement Meeting
Communication with your creditors is the first thing. Don’t avoid their phone calls or any other attempts to reach you. This only compounds the problem. Even if you are not quite ready to sit down and do some debt negotiation, you still need to tell them that this is what you intend to do.
When a creditor calls, emails, or sends you a notice in the regular mail, answer back and be honest. Instead of hiding from creditors’ calling, contact your creditors and tell them that you would like to negotiate your debts with them, and ask if you can make an appointment to do this.
Most creditors will appreciate your effort to pay them what you owe, and will be more than happy to sit down with you to figure out how.
Before the meeting, do some research on your rights and on what creditors can and can’t do to get you to pay what you owe. Many times aggressive debt collectors will try to convince you that you are facing certain unpleasant consequences. Being well-informed can help you when it comes time for negotiation.
Steps to Negotiating a Debt Settlement
First, you must understand your exact account balance. Find out how much of this balance is interest charges and how much are real charges to the account. This knowledge can help you think about what you will need to say and do when you call your creditor.
Second, you can expect that the creditor may tell you that they never enter into debt negotiations. If you get refusal answers, then you will want to ask for a supervisor. If they still decline your negotiation offers, you can write a letter stating that you attempted to negotiate and that you can’t afford to pay under the existing conditions.
At this step, wait for a call back from the creditor. While waiting, don’t allow yourself to feel bad about your debt but learn about how your creditors look at your situation. If you have a decent debt negotiation offer, there is a chance that your creditors jump at it and everyone will be happy.
It is important that you find an offer that is fair and agreeable to both parties. Your debt settlement goal is to hold your ground and make sure that the terms are agreeable to you and that you are not pressured into anything. You shouldn’t accept the new terms that you feel are not acceptable to you.
Those are brief tips on negotiating and settling debts on your own. If want to improve your chance of success you can join a do it yourself from ZipDebt. The company will teach you the direction with ongoing support so you can confidently negotiate and settle debts with creditors on your own.