Settling Debts and Doing Your Own Negotiating
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The phone rings. You don't pick it up, because you know that it's going to be another debt collector. You've fallen behind - the mortgage, rent, credit cards. It doesn't matter, you're still under water for a lot of money and are looking for a way out.
It's always best to avoid having your debts get to this point, if possible; you can deal with your creditors on your own, but it's a good idea to work with an attorney, debt management service or debt counselor. Debt negotiations can be a difficult and lengthy process and most likely your time is better spent elsewhere. If you really want to go it alone, the following tips can help you negotiate the best settlement:
First - talk to your bank or your mortgage company about renegotiating the loan. They are terrified of loan defaults, and may be more flexible than you'd think (Of course, if you've been in your home for seven years or so - before the start of the housing bubble - you may be sitting pretty now.)
Before you call, have a plan. Tally up all of your debts, all of your expenses in a month, including a general "oops" amount, and figure out how much you can really afford to pay. Paying down your debts takes some fiscal discipline; cut back on going to fast food restaurants and learn to cook more vegetables for meals are two surprisingly easy ways to cut back on expenses.
Figure out how much you can realistically pay, then tell your creditors you can make half of that; they'd much rather you exceeded the agreement you negotiated than fall short of it. Likewise, make sure that part of your budget includes stashing some cash away as a reserve fund.
Know what to ask for when you do call. You can probably get late fees waived. You may be able to get an interest rate reduction. You probably can't work out some sort of debt annulment program, unless you've got a court order assisting you. However, most creditors and collections agents would rather get something than nothing.
Fifth - start saving. Yes, it seems crazy to start saving while digging your way out of debt, but it's a good habit to get into. Once you've paid off one of your largest debts, take half the money you'd been allocating to it to paying down the next highest debt and put the other half of the money in a money market account or a series of certificates of deposit.
If these won't work, it's time to talk to a credit and debt counselor. They can help you with a number of options ranging from consolidation loans to debt settlement programs to bankruptcy filings, depending on how dire your straights are. Your aim is to hold on to the things in your life that are important to you.
Article Source: Articlelogy.com
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