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subject: The Basics Of Debt Settlement [print this page]

Sometimes
Sometimes

in life, we dont really realize how much trouble we are in until

it comes knocking on our doors, repeatedly. Sometimes we just breeze

through life much too nonchalantly that we are unaware of the

consequences of our decisions especially when it comes to our

financial stability. It is essential that we acknowledge

responsibility for every decision we make in our lives including the

ones that probably spell financial disaster.

If

you find yourself buried more than knee deep in debt and there is no

way for you to pay all your debts all by yourself, you might want to

look at a solution known as debt

settlement.

You can opt to negotiate with your creditors yourself but it is

advisable for you to engage a third party professional to be the

negotiator. It is better when a professional negotiates for you as

creditors usually trust credit relief companies more than they trust

individuals. Besides, your credit consultant is definitely more

knowledgeable and experienced in handling cases like this and will be

able to approach your issue from an objective point of view.

You

might want to make sure that the company you engage to help with your

debt

settlement

is a reputable

company so the risks of you getting cheated out of your own debts is

very much lower. Bear in mind that there is usually a fee for

professional credit consultation so you have to be prepared to pay

the consultants. Sometimes they charge a certain percentage of what

you will be paying your creditors every month. It depends on the

severity of your case. So whatever you do, be careful and be very

wary of companies that show you their fees breakdown even before you

have a chance to tell them of your predicament.

Engaging

a company that offers debt

relief services

can be very relieving as you will not have to deal with your

creditors all by yourself. Your appointed credit consultant will act

as liaison with your creditors and negotiate with them to reduce the

amount of your debt so you will be able to pay off the said debt.

Rather than losing 100% of their money with you filing for

bankruptcy, most creditors will offer debt reduction. This means that

instead of paying off 100% of your debt, they would reduce the amount

up to 50%. In the end you could be only paying for half of what you

originally owed. After your creditors agree on the reduction rate,

your appointed credit consultant will then work towards restructuring

your monthly payments so you can pay your creditors at an amount that

you can afford.

Sometimes

your creditors would insist on you making a one-time full payment of

the reduced debt. This is when your credit consultant would probably

advise for you to consider debt consolidation. You could apply for

another loan to pay off your existing creditors. Nowadays most banks

offer lower interest rates provided you start to consistently make

your monthly payment immediately. So you can use the loan to pay your

existing debt.

It

is advisable that you be careful that you dont slip into a comfort

zone where you dont feel any sense of urgency to start paying off

your consolidation loan. Although the interest rate might be lower

than usual and you feel like you have plenty of time to pay them off

later, it is always smarter to start paying them off immediately.

After all you would not want what happened to you with your previous

creditor to happen all over again would you?

Try

and keep in mind that if you decide not to engage a credit consultant

to negotiate with your creditors on your behalf; you may have to

prepare yourself to be able to convince your creditors to reduce your

debts on your own. Most importantly, you will need to be able to keep

your emotions in check because your creditor is less than likely to

grant you a high debt reduction rate unless you treat the negotiation

like a business transaction.

Your

creditor is also not going to be the one offering you a certain

percentage of debt reduction. So you may need to be smart and

strategize on how to make your own debt

settlement offer

and convince your creditor to agree to it. It is never good to go in

blind as this will give the creditors the impression that you are not

serious about settling your debts. You can do some extensive

groundwork and let your creditors see that you have considered all

options and your research has led you to come to the conclusion that

your offer is the best option there is for you to pay them and for

them to get their money back. Dont pick a fight though. It might

take some convincing from your part. But if you handle it like a

professional, you will most likely get what you come for.

by: Ask Bill

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