subject: The Truth Behind Debt Negotiaiton In Order To Settle Your Bills [print this page] If you find yourself drowning in debt, you may want to consider debt negotiation. As you make this consideration, however it is important that you know The Truth behind Debt Negotiation.
Some people have successfully negotiated their debt and settled their bills for much less than was actually owed. Some of the stories are exaggerations. Truthfully, if a company thinks that it is likely they will get nothing from you they are willing to settle for a lessor amount than the full amount owed.
The question is "How do I convince my creditors that I am likely to default on my loans without negotiation?" The easiest way is to miss a few payments. Your financial difficulties become apparent rather quickly under these circumstances. However, missing those payments can cause a large drop in your credit score and make it difficult to get credit in the future.
Even if the company offers to mark the bill as paid on your credit report for a settlement, you should realize that "paid" is a negative remark indicating the settlement. Future lenders understand the code and it reflects negatively on you. In fact, sometimes a paid on a charged off bill will bring negative activity to light and lower the credit score.
If you decide to work on debt settlement, it is important that you get everything in writing. While the companies may want you to pay immediately by phone, you should realize that anything that is verbal will not hold up in court. You need to have the promises in writing, even if you must wait for the document to be typed and faxed before you make a payment.
The Truth behind Debt Negotiation is that it can be done, however, debt negotiation often will ruin your credit score. If at all possible, a better route is to pay your bills on time and to pay them in full.
by: Alan Nottingham
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