Reasons To Consolidate

Stop Collection Calls
Lower Monthly Bills
Free Credit Counselors
Repair Your Credit
Get Out of Debt For Good
Foreclosure Facts
Loan Modification
Debt Elimination
Debt Settlement
Debt Negotiation
Personal Debt Freedom
Debt Management Plans
Debt Consolidation Guide
5 Steps To Debt Relief
Types of Debt Relief
Tips To Reduce Debt
Understanding Tax Debt
Payday Loan Relief
Debt Negotiation Letter
Debt Verification Letter
Credit Card Help
Credit Card Rules Changes
Store Credit Cards
Fix Credit Card Debt
Debt Consolidation Loans
How Debt Consolidation Affects Credit
Free Bill Consolidation?
Reduce Your Debt
The Debt Snowball
Financial Planners
Medical Debt Guide
Seniors in Debt
How to Keep Your Job
What if You Don't Pay Bills
Wage Garnishment
Mortgage Hardship Letter
Get Out of Debt
Bad Credit Personal Loan
Life After Bankruptcy

Get a Reality Check

You cannot ignore the creditors. They are not going away. You need to take a realistic look at your debt and determine if you can make all of the payments with your current income, but if you already have late or missed payments, chances are you cannot. Your creditors are calling, and you don't know what to tell them. You are losing sleep, avoiding the telephone, and trying to put off callers who do get you by promising payment soon. Stop this pattern right now and become proactive with a debt settlement plan. You can keep your vision of the future bright once you are on the right track.

Debt Settlement on Your Own

If you decide to pursue debt settlement by yourself, you will need to have time, good negotiation skills, and a willingness to follow through. There are some very specific steps you must follow:
  1. Contact all creditors by phone and tell them that you cannot make the payments. Ask them for reduction in interest rate, reduction in payment, and reduction in total debt amount. If you are less than 60 days late, chances are the answer will be "no." If you are more than 60 days late, they may be willing to begin the negotiation process. Remember, you have something they want, and anything they can get is better than nothing if you should declare bankruptcy.
  2. Tell creditors not to call you at work.
  3. Continue the negotiation process until you achieve an agreement. Some creditors will settle for 50% of the original debt, so keep at it.
  4. If you debt has already been transferred or sold to a collections firm, your negotiation process will be different. First, tell them not to call you at work. All other communication will be by registered mail (return receipt requested), and you will immediately write to them, telling them not to call you at home and to put everything in writing.
  5. Ask for a debt validation, which will include the original creditor, the total debt amount, and any fees which have been added to your debt. Attempt to find out whether the debt has been transferred or sold to the collector. If transferred, the collector is working on a percentage of whatever is collected. If sold, the collector has purchased it for pennies on the dollar, and your bargaining position is far stronger. Start at 35%.

Debt Settlement by Professionals

If you do not have the time and skills to do this yourself, you need to employ someone who does. Debt settlers will charge fees, and check these carefully, because the market is very competitive. The settlement professional can negotiate for you, has the contacts at major creditors, and can probably get through the process far more effectively than you.

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