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Debt Settlement -- Do It Yourself and Get Results

By Amy Lewis

Debt settlement is the process of striking a deal with your creditor so that you can get a reduction
of your outstanding balance or reduce the amount of your monthly payments and/or extend the period of repayment.

Negotiating debt settlement is never a pleasant task for anyone, but successful completion of this task can relieve stress and can bring about some positive changes in your finances. There are certain debt settlement principles or guidelines that you need to follow, if you want to settle your debt by yourself. DIY debt settlement negotiation can seem intimidating, but with the following few steps that are given below, it isn't that hard to do.

Save Money Payments
To negotiate and finalize the settlement with the lenders you need to have adequate funds in your possession. If the lender agrees to a lump sum settlement, they will want to be paid soon afterward. You can stop paying the bills you want to settle and start saving money to pay off the amount you eventually settle on.

Due to banking regulations a bank must charge off bad debts six months after they become initially overdue. The best time to settle is right before charge off. But remember, if you wait too long and the debt charges off, The charge off will remain on your credit report for seven years. If you settle before the charge off, you can make the credit listing part of the negotiation.After charge off, you should also give careful thought as to whether you should settle for any amount. What would the benefit be?

Time to Negotiate
Before making a proposal to settle your account, you need to confide in your lenders about your current financial status explicitly and honestly. Convincing the creditors to settle the account at a lower interest rate is the hard part of the settlement process. While negotiating, you must aim at eliminating all late fees, finance charges and over the limit fees from your account, as well as a negative credit listing.

If a creditor is unwilling to settle your debt with at least a 30 to 40% reduction, decline their counter offer and wait until the charge off time approaches. Do not expect your lenders to behave cordially in response. You might have to call them several times and wait patiently but as the charge off date (the date when a creditor writes an uncollectible debt off its books) approaches the lender might be more willing to compromise.

Get It in Writing
Once the settlement terms have been agreed to, do not pay immediately; instead, demand that the lender to send you a copy of the agreement on its letterhead with specific mention of dates, monthly payments (if applicable) and the settled amount. Make sure that the agreement confirms that once the settlement amount has been paid the debt will be discharged. Remember creditor’s verbal commitments won’t be taken into account as valid documents in this regard.

To make your efforts of DIY debt settlement successful, prepare yourself fully. Keep the copies of current bills and settlement letters from the creditors in tact to avoid any future collection harassment. It is also important to keep yourself cool under pressure, never use profane language while communicating with the creditors.

Save thousand by opting for DIY debt settlement program and settle your debts in a
better way.

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