Symptoms of the Disease

You have a stack of bills each month that you cannot pay. There is simply not enough money to go around. Payments are late or missed, and creditors are calling daily wanting to know when you will be getting current. You try to put them off by telling them that you hope to be able to pay them soon, even though you know that this not really going to happen. Your antidote to a bleak financial future is at hand, and it is debt settlement.

The Self Antidote

Debt settlement is a process of negotiating with creditors to obtain a much more beneficial repayment of debt that you cannot currently pay. You must be 60+ days behind in payments before creditors are normally willing to negotiate, but remember that they are interested in getting whatever they can, because anything is better than nothing. If you declare bankruptcy or have not assets for them to come after, moreover, they have no way of truly recovering their losses. This situation puts you in a position of power.

Tell your creditors the truth. You cannot pay them, you do not know when you will be able to pay them, and you may have to declare bankruptcy. They are usually willing to begin the negotiation process at this point. If you conduct the negotiation process yourself, you will need to have lots of time, persistence and stamina. Even more will be involved if you are dealing with a collection firm, because, for your own protection, everything will need to be in writing, and you will have to inform them in writing (return receipt requested) that they are not to contact you by telephone at work or at home. You will need to keep copies of all correspondence, and you will need to be strong. Collectors work on a percentage of whatever they can collect or, if they have purchased your debt, they have paid only pennies on the dollar for it. You should definitely begin negotiations at 35% of the original debt, the elimination of all future interest charges, and a monthly payment you can easily afford. If you are still dealing with the original creditor, you may be able to get a 50% reduction in total loan amount, depending on the specific creditor.

The Antidote

If all of this seems to be complex and time-consuming, you are exactly correct. And if you don’t believe you have the skills or time to conduct this process yourself, there are lots of settlement professionals who do this for a living and can get you a beneficial settlement. They have the contacts with most major creditors, spend 8 hours a debt on debt settlement, and will analyze your entire situation to come up with a plan of settlement that will fit your needs. There of course will be fees involved, but these are generally rolled into your new single monthly payment which the settlement professional then distributes to your creditors. Your follow-up will be to continually check to see that your debt with each creditor is being reduced as payments are made.

Debt settlement stops the calls and the worry. Yes, it will affect your credit report negatively, and you will need to spend time repairing that rating, but you can do so with peace of mind and a look toward a bright future.