Settling Debts Without Professional Help - Dealing One-on-One with Creditors

Many debts, especially credit card debts, are sold to collection agencies once they come delinquent by more than 90 or 120 days. Once this happens, you are no longer dealing with your original creditor, and you have little hope of fully recovering your credit status until the original creditor's "charge off" is removed from your report, seven years later. For this reason, it is best to avoid having your accounts sent to collections. But while it is possible to deal with your original creditors without the help of a credit counseling agency, debt management firm, or attorney, it may not be advisable. Debt negotiating can be a time consuming, nerve wracking task, and you probably have better things to do with your time. If, however, you insist on handling your situation without professional help, here are some tips for gaining the most advantageous settlement possible:

Tip #1 - The Phone is Your Friend

Unlike when dealing with collection agencies, it is perfectly okay to negotiate with your original creditor over the phone. Calling someone to whom you owe several thousand dollars can be intimidating, and this is one reason that hiring a professional can be advantageous. But if you have the strength of will to make the calls, then the first thing you need to do is make sure that your debt is still with the original creditor. Calling them to make sure and to let them know that you're interested in paying the debt is one good way to avoid having your account sent to collections.

Tip #2 - Make Your Case

Most creditors are not going to settle with you unless you are at least 60-90 days behind on your bills. Why would they? So far, you've been a good customer who has paid reliably. A lot of people miss a payment or two from time to time, but most end up making up for the missed payments (with penalties and interest), and return to paying their accounts as agreed. In order for a creditor to settle your account with you, you're going to need to make the case that you're unable to keep paying, and that a settlement is the creditor's only chance of getting a dime out of you without a court order. One way to make the creditor take you seriously is to hire professional help.

Tip #3 - Negotiate for Your Credit Standing

When making a settlement with your creditor, the most likely result to your credit standing is the blemish of "did not pay account as agreed," or "settled for less than total amount outstanding." Both of these marks are nearly as bad as a delinquency or "charge off." So one thing you should negotiate for is to have your account credited as "paid as agreed," or in the least, "settled." Honestly, you are unlikely to get your creditor to report your account as "paid as agreed," unless you pay the full amount due, however, you may be able to get them to waive some interest and penalties and still get this superior report distinction.

When Professional Help is Needed

You may be able to handle one, two, or even three debt negotiations on your own behalf. But with each additional account, the burden of time and stress weighs heavier and heavier. Few people have just one account that needs settlement, and few creditors will be willing to negotiate with you if they see you're remaining current on your other payments. This is why professional debt help may be the best path to pursue. At Debt Relief USA, we can help you make the right decision and find the best professional for your needs.