It is not necessary to approach a debt settlement company for negotiating your debts. You can yourself negotiate your debts with your creditors. The most important point to remember is that you can only go for the option of debt settlement if your debt exceeds $10,000 and you are an American citizen. A debt settlement is always a better solution as it is beneficial for both the parties. In debt settlement both the parties agree to a certain amount which is to be deducted from the debt. It can usually be 50 percent or more depending on your negotiation skills.
If you are negotiating your debt by yourself then here are some tips for you which can be helpful while debt settlement.
Start arbitration from your end:
Let your creditor know that you can pay the debt in a single instalment of the debt negotiation is successful. Creditors want to settle debts as soon as possible to increase the cash flow of their organisations and paying them in a single instalment will always get them interested.
Realistic Approach:
Be what you are. You should present your actual financial situation to the creditors. Hiding anything from them can eventually lead you to the same situation. Explain and discuss everything with creditors. Tell them the reasons behind your reluctance in paying off debts? Keep fighting for more reduction. Your reality and truth can help you out to get maximum reduction in your debt amount.
Keep on mentioning your right to file bankruptcy:
When you approach creditor for debt arbitration and before getting started with your negotiation, keep mentioning about your right of filing bankruptcy. Bankruptcy is the last method a debtor chooses after arbitration. No creditor would ever want his debtor to go for filing bankruptcy. Debt settlement at least gives the creditor the half of money. Whereas filing bankruptcy would result in nothing but losing the entire amount. By this way debtor also gets a reduction of fifty percent on their debts.
Credit Score:
A credit score reflects your financial standing. Make sure that the debt is written of your credit score after successful negotiations with your creditors. Credit score has various benefits and it also affects your chances of getting any future debts. Clearing off your debts from the credit score is a written proof that you have successfully negotiated your debts and paid them in full settlement. You cannot be held responsible in future after the debt have been cleared off from your credit score.
Debt settlement is a legitimate alternative to filing bankruptcy and often makes sense for consumers on the verge of bankruptcy. There are also other debt relief options available so it would be wise to speak with a debt relief specialist to go over your different options.
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