February 06, 2009

Tips on Debt Reduction Settlement

Are you in debt? Facing collection problems from the rude debt collectors? You need to handle the situation immediately. Debt settlement is always a better solution than bankruptcy. Debt settlement is a process of negotiating with your creditor either making a lump sum payment which is lower than the total balance, or making a new payment schedule at a reduced interest rate. In this situation your creditors will definitely negotiate with you, because they know get something is better than nothing.

So how will you negotiate your debts? If you are interested in debt negotiation, either you can hire a debt negotiation service provider or you can contact your creditors by yourself. When you want to contact creditors for negotiation, please follow this suggestion:

1. Try to be calm and convincing: Always explain your situation in professional terms. They are not going to negotiate with you, so screaming or crying is not a good idea to help you.

2. Be patience, do not give up them easily: If your creditor does not agree on your request, try to explain them that negotiation would be beneficial for them. If your request is still disagreed, do not agree to anything of your creditor.

Debt negotiation letter: You can also send a debt negotiation letter and that should be professional and clearly state your arguments. Send it by certified mail and keep copies of all your correspondence.

Remember some important points when you negotiate:

1. The negotiate amount you can afford to pay. This should be a reasonable amount 40-60% of the total debt. Lower than that will be rejected immediately.

2. Negotiation is a process. When you negotiate, you make an offer and your arguments. Expect them to make a counter-offer and counter-arguments. So try to be patience.

3. Your job is to convince them and creditor's job is to convince you to pay more. If you both play your roles properly, you’ll reach an agreeable settlement.

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