How to Go Through a Successful Debt Negotiation Process
Go Through a Successful Debt Negotiation Process
When you are knee deep in debt, one of the alternatives to get yourself out from the financial hardship is through debt negotiation. In other words, you are required to get "discount" from your lenders so that you can pay off your outstanding balances in an easier manner.
There are a few things you need to bear in mind if you want to go through the whole process successfully:
When you first propose your settlement amount, you are advised to offer your creditors with a reasonable figure, for instance, 70% of your total debt. Don't expect to have 50% of your debt forgiven. In general, creditors will never take your request seriously if your proposed amount is too little. The creditors will think that you are taking advantage from them. Furthermore, the creditors will also ignore your request if you propose to settle your debt by installments. They usually want the debt to be repaid in one lump sum. In normal circumstances, the negotiation process is done through settlement letters. If the creditors insist to meet you face to face, you had better look for an attorney or a credit counselor to accompany you. Make sure your rights as a debtor is well protected. You are reminded to keep track of all correspondence with your lenders. All the written communication will serve as proof if there is any dispute. If you negotiate through phone, you are advised to jot down the main points of the conversation. Having the name and the title of the officer in your record is important for verification purpose. The creditors usually reject your offer during the first attempt. Don't give up. You are encouraged to send in your request again and again. Make sure you are consistent in making your offer. If the creditors agree with your settlement proposal, you should take prompt action to pay off your debt after obtaining a written confirmation from your creditors. Don't drag the payment anymore. Don't give chance to the creditors to change their mind. After the payment is made, you must make sure that the clearance appears on your credit file within 2-3 months. The whole process is considered completed after your credit report is updated.
Last but not the least; although you have got your debt settled, that is not the end of the "story". You need to rebuild your credit. Start taking necessary steps to regain your financial strengths.
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