Negotiate a Debt Settlement

How can I negotiate my own debt settlements with creditors without using a "debt settlement" company?

unsecured debt; collections accounts

Public Comments

1. Write to them and request a settlement; tell what you can afford to pay. You can call them, but it is only binding if it is in writing, so you should at least follow up in writing.
2. You can ask. Creditors are not likely to "give a little" since they have so much more power now, thanks to the changes in bankruptcy filing by President Bush. You can not easily erase a debt, so they have much less incentive to help you. They would much rather force you into Chapter 13 bankruptcy. Then the courts enter a judgment against you, which stays on your record for future creditors to see. Also, you are forced to pay and the courts are then in control. It can't hurt to ask, but if you are already in collections, it is not very likely. Try going to a Lutheran Social Services, CCCS, legitimate company to help negotiate your debts.
3. Check with a legitimate consumer credit counseling plan first. They will arrange repayments to creditors on a voluntary basis and reduce your interests (in most but not all cases) and get you debt free in 3-4 years. Debt settlement isn't really much different from bankruptcy, is it? You are defaulting on what you owe but still paying half or whatever percentage. With true bankruptcy (if you qualify) you owe nothing. Your credit report??? It will be noted either way for 6-10 years regardless. You can call each creditor and see what they will offer you in terms of a repayment agreement but it's unlikely that you'll find it worthwhile.
4. Call and tell them you want to make arrangements and that you're thinking about using an agency, but want to cut out the middle man. They might be more willing to work with you. The reason being that when you work with a debt consolidation agency, they make deals with your creditors and pay them pennies on the dollar to assume your debt. You end up paying your full debt to the agency. Going directly to your creditors, they may end up getting less than the debt, but more than they would get from the agency. If you talk to someone smart, they will seriously consider the offer.
5. Plenty of good advice here.
6. Check these articles out, it may help: What is Debt Relief? http://www.askaquery.com/Answers/qn1583.html Debt Management and Building Wealth http://www.askaquery.com/Answers/qn1581 How to lower your debts? http://www.askaquery.com/Answers/qn1576.html How to reduce debt : How to lower your expenses? http://www.askaquery.com/Answers/qn1577.html
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