Free debt settlement tips and debt settlement company services.
Let a debt settlement company help you negotiate with creditors, or use our do-it-yourself free debt settlement tips. View our sample debt settlement letter to send to a creditor.
Do
It Yourself for Free Debt Settlement
Not comfortable dealing with creditors yourself? A debt settlement company can do it for you, and can do the entire process quickly.
Determine how much you can afford to pay in total to settle debt. Write down all of your essential expenses, such as rent, mortgage, food, etc. Subtract this amount from your monthly net pay. Whatever is left over is what you can pay out each month on your debt settlement plan.
Make a list of all of your delinquent accounts and the amounts owed on each.
Next to each creditor's name and balance owed, write down how much of your debt settlement budget you can pay toward that account. The closer to 50% of the balance that you can get, the better chance you'll have of getting your offer accepted.
Contact your creditors (or the collection agencies if your debt has been turned over). Explain your plan and how it affects them. Explain that your current financial situation simply won't allow you to make your payments as you originally agreed.
Tell creditors how much you owe in total, how much you have available to pay off all your debts, and how much you can pay to settle their particular accounts. Let them know that your offer is being sent to all of your creditors, and the ones who accept the offer first will be paid off first.
You'll receive some acceptance letters as well as rejections. Keep a copy of the acceptance letters for your records and immediately send in the amounts agreed upon, requesting a receipt stating "paid in full". Don't send any debt settlement payments until you get the revised agreement in writing.
Each month, repeat the process while adjusting your debt settlement offers upwards. You can now afford to offer each creditor a higher percentage of the outstanding balance because you have fewer debts left to pay off. Again, you'll receive some acceptance letters and perhaps rejections.
Keep repeating this process each month until all of your debts have been settled.
Important things to keep in mind:
Insist on getting all debt settlement agreements in writing, and never pay the amount agreed upon until you receive the signed written agreement. Your creditors could easily accept your offer on the phone, then "forget" about the settlement offer after receiving a payment. Also note that creditors may not be willing to annotate settlement paid in full on your credit report.
Keep all signed agreements and receipts for your records, even after the accounts have been marked "settled" on your credit reports.
Be very careful with your finances in the future to ensure that you never have to go through the debt settlement process again.
Be sure you follow all state laws regarding legal settlement agreements.
Get more information about debt, and read our articles related to debt settlement.
Debt
People
are seeking debt advice every day as they are buried in bills. There are some
tried and true methods to get out of debt, yet deciding on the one that is
right, can be difficult. The most important thing is to stick with a plan and
keep track of goals. Getting out of debt requires dedication once a plan is
implemented.
It
is so easy to become burdened with debts, yet almost impossible to escape from
it when thousands of dollars are owed. Unfortunately, some may wait too long to
try to tackle it. To be able to get control of it, it is necessary to understand
the types of debt. Some debts are unsecured, which means the debt is not attached to a piece of
property, like credit card debt. A mortgage payment is a secured debt, and if
the loan is not paid, there is a risk of losing the home.
Getting
control of bills needs to begin with a carefully prepared, written budget, and keeping
track of every dollar. It is a guide and may need adjusting from time to time.
That is ok, it helps to review it, adjust it, and, stick with what is written down.
Organize
all required monthly expenses. Begin with food expenses, the mortgage payment,
and utility bills. Consider looking over last years bills to get an estimate of
the total expenses for the year. For example, a utility bill may be higher
during hot months or cold months, and it may be necessary to set aside money to
prepare. Reviewing last years income and expenses can help you discover any
extra payments for insurances, taxes, etc.
Example
of Expenses Listed on a Budget:
*
Mortgage Payments
*
Utility bills
*
Phone bills
*
Child Care
*
Gifts, Birthdays, etc.
*
Gas, auto payments, repairs
*
Food, cook more, eat out less
*
Money deposited into a savings account.
The
list above is an example, make your own list and write a dollar amount by each
item. Consider things on the list that could be eliminated. For example, cell
phone plans could be reduced or home phones may not be needed. Notice that
entertainment is not on the list. By eliminating this expense, there could be
more money to use to pay down bills. If it is put on the budget, make sure to
set an amount that is reasonable and set limits. Entertainment expenses can take
a big bite out of the monthly income. Try to do more home activities for a
while.
First
time budgets can be a success, and it takes time for it to become a habit and
refined. It is a starting point, as many people never follow one, and later
wonder how they got into debt. The more it becomes a habit, the more you know
your expenses, and what you must plan to spend out of each paycheck. Keeping
bills paid on time can be huge stress relief.
Target
debts to pay every time a paycheck is received, spread it around to what is
necessary to pay first. After some weeks, you may find your finances in better
shape and feel some pride in getting debts well under control. Paying debts must
become a weekly target, to make progress and get bills paid. This also helps to
avoid any added expenses. Using a calendar as a reminder is a good tool to use.
When getting out of debt is not working, consider a free quote from a debt
counselor.
Chargeoff credit card - How to charge off credit card balances yourself, or get professional help from a debt settlement company.
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Tip of the Day: To curb credit card charges, wrap your credit card in a sheet of paper and keep a log of purchases written on the paper, with a grand total of charges in view each time you reach for your card. Before swiping your card, figure out how many hours you'll have to work in order to payoff the charge and jot on the paper: "IOU #Hours of Work". Perhaps seeing how long you'll need to work to payoff the charge will help curb spending.
