Do It Yourself Debt Settlement

Making The Right Decision Before Attempting a Do it Yourself Debt Settlement

One means of accomplishing your debt reduction goals and saving money is to simply do it yourself. However, this will not always be the case and you must carefully weigh the consequences before attempting negotiations.

There are some disadvantages to do it yourself debt settlement versus hiring a professional debt negotiation company. One disadvantage is that may creditors are not as willing to work with individuals and may not offer very favorable settlements. Another consideration is the time and dedication that it takes to negotiate and settle the debts to your advantage. Remember, this is going to be a long drawn out process, if you’re not going to commit to the long haul you may as well leave it to a professional company. And if you don’t have the necessary negotiation skills and experience, you will never know if the creditor is giving you the best terms available. 

After careful consideration, if you feel confident in proceeding with a do it yourself debt settlement, follow the negotiation instructions below.

First and foremost, make sure you understand which type of debts can be settled. All your qualifying debts must be unsecured (see qualifying debts). Also, you should not attempt to negotiate any debt that has not been delinquent for at least 3 months.
When you are preparing to call a creditor to make a settlement arrangement, it is important to have everything you need in front of you.

This includes the following:

·  A copy of your most recent bill or a recent credit report that shows what you owe.

·  Letters from the creditor offering a settlement or attempting to collect on a debt.

·  A specific amount you are able to pay should a settlement be reached. This may be either a lump sum or a monthly payment amount that you can be comfortable with.

Contacting a Creditor

The main thing to remember is that in settlement negotiations, you always have the natural advantage. You have what the creditor wants! So the first rule of thumb is to never sound eager to settle. Regardless of how much you owe on the debt, you want to pay what is comfortable for you. There have been thousands of people who settled their debs for as little as 25 cents on the dollar, although 50% or more of what you owe is a much better goal to shoot for.
At first, most creditors and collection companies will try to hold their ground. When you have accounts that are significantly past due, at least 4 months or more, don't expect the creditor or collector to be cordial. Their training is to accomplish two goals; One is to verify and confirm as much of your information as they can and secondly, most importantly, is to get any payment they can.

Many collectors are very knowledgeable when it comes to settlement negotiations, while others will simply ignore them and try to collect. It's very important to make your intentions clear from the start, without giving in or sounding too eager.

Taking Charge of the Conversation

Be prepared to talk to creditors that will simply refuse to negotiate and may even try to use scare tactics. As frustrating as this may be, never loose control and remember that there are always options available to overcome anything.

The first thing is to try and speak to a manager or supervisor. Individuals in charge always want to make reasonable payment arrangements or settlements. If this fails, you can very politely end the call. Terminating the call as politely as you can is extremely important, as anger or foul language will certainly not work in your favor and make matters even worse. Also keep in mind that a majority of the conversations are recorded and monitored as well.

You can also write a letter addressed to the manager or the president of the company outlining your plan to pay off or settle the account. Be very specific in regards to the dollar amount you will be paying and the dates you will be making the payments.

Keys to a Successful Do it Yourself Debt Settlement Negotiation

·  The best thing is to make your first contact with the creditor or collections company by mail. This will always give you the upper hand because they will end up calling you to settle. Remember, you want them to come to you because you have what they want.

• ·  Never sound eager to settle or you will lose the upper hand. Don’t give the creditor any reasons why you are trying to settle other than extreme hardship. If you do, you can forget about any kind of deal. The creditor will now have the upper hand and insist on the full amount.

·  Don’t accept their first offer, especially on the first contact. Once you are able to get them down to about half of your debt. Tell them you need to sleep on it and arrange a time for them to call you the next day.

·  Keep a record of all of your conversations with creditors and include the date, time and the person's name you spoke with. It may come in handy later if there is a dispute over payment or settlement arrangements.

·  Always get a letter from the creditor with the agreed upon amount of the settlement or similar payment arrangement. A verbal agreement isn't valid in many states and it would be your word against the collector.

The main goal when negotiating a credit account is to settle on a reduced amount that will be manageable for you. You want to eliminate all finance charges as well as any late and over the limit fess associated with the account. This alone  can reduce your balance by 25 to 40 percent. But you should never stop there. At least 50% or more should be your ultimate goal.
If the collector is reluctant to settle at the amount that you are ultimately seeking, advise them that they are not the only account you have and that you may be seeking bankruptcy as an alternative to settlement. If they still don't meet your proposal, then politely decline the arrangement and terminate the call.

This is when you need to be very patient as well as firm. As long as you maintain control, the odds will always be in your favor. They will always attempt to call you back to renegotiate or send another settlement letter in the weeks to come. By utilizing patience and waiting out the collector, you will always get the most favorable settlement available.  

There are certain elements that can spoil your efforts to negotiate and settle your unsecured debt.

The first thing as mentioned before is to refrain from arguing or using profanity with collectors.

When writing checks to the collector, make sure not to include the words "paid in full". This is a notion that is absolutely untrue and suggests that if a collector or creditor cashes the check with paid in full written on it, the entire debt is then settled.

Make sure that you always know your consumer rights as many creditors are counting on individuals not knowing them, thus attempting to intimidate consumers. You can learn about all about consumer rights by going to The Federal Trade Commission website and reading up on the Fair Debt Collection Practices.

A do it yourself debt settlement can be achieved if you are patient, confident and prepared. It is very important to keep your cool and never sound too eager, a better deal can always be negotiated. And finally, if you are unsure of your consumer rights, visit The Federal Reserve Board and research the credit card laws in your state.

IMPORTANT: Before you attempt a debt settlement negotiation yourself, you must be 100% positive in your abilities to do it successfully.
If for any reason your negotiations do not work out as favorably as you would like, correcting the situation may no longer be possible, even with the aid of hiring a professional.