Do It Yourself Debt Settlement

It is possible to settle your debts on your own, but you need to prepare yourself for dealing with debt collectors!woman-worried-debt-pressure

Here's some tips for Do It Yourself Debt Settlement:

If you have tried unsuccessfully to keep up with all of the required, minimum payments on your unsecured debt, then you should definitely consider Debt Settlement.

Although I have been helping people deal with the financial pressure of having too much debt for over 10 years now, and have helped hundreds of people settle their debts, I do believe it is possible for someone to settle debts on their own, but you need to "buckle up for a bumpy ride!"

You need to be prepared to spend a lot of time (many times very frustrating, emotionally) dealing with professionally trained debt collectors. 

These debt collectors are usually paid a commission or percentage of how much they can get from you, so you know they are not going to give in, willingly!

My point is that you need to understand that the Debt Collection Industry and Debt Collectors specifically are in business to make a profit and they are not going to settle without using every method (legal and border-line legal) to get you to pay as much as possible.

Since you are considering trying to settle your debts for less than the full balance you owe, I'm guessing that you fit one or more of the following criteria:

  • You have been laid off or lost a job, and therefore your income has been dramatically reduced.
  • You may have had a loved one or spouse become extremely ill or possible die which affected your ability to work.
  • Divorce is usually a financial challenge.
  • A long term or permanent disability will not allow you to earn what you used to earn.
  • Retirement on a fixed income that is barely or not able to keep up with the bills.

But, if you are ready to give it a try, then here's some tips to help:

Understand the basic debt collection process.

Typically, when an unsecured account (not a "secured loan", which is backed by property or other collateral) becomes delinquent, it is usually charged off and turned over or sold to a debt collector.

This debt collector may be an attorney/law firm, that specializes in the collection of debt.

It takes time for a delinquent account to be considered for a settlement. 

Most debt collectors will not consider a settlement until the account has gone 120 - 180 days without any payments.  By the way, please be wary of a HARDSHIP PROGRAM the creditor offers!  Usually, they only barely pay the interest and ultimately you will have to start repaying the payments as before!  Basically, you are just delaying the inevitable of having to repay 100% of the debt you owe with interest.

The best settlements are usually negotiated when you have a lump sum or one-time payment saved up to offer.

After you have carefully prepared a BASIC HOUSEHOLD BUDGET, and know exactly what you can set aside each month to go towards negotiating a settlement, you must be very consistent and disciplined to actually put that money aside.

Set a goal of being able to offer at least 25% - 50% of the balance on at least one of your accounts. 

You'll also find out that the smaller the balance, the harder it is to get a decent settlement reduction!  The debt collector believes that if you ow $300 - $500 or so, then you should be able to come up with $200 -$400 and they may give you up to 6 months to do it!

However, if you owe $5,000, then they may be willing to take a settlement of 50% or less as you are a risk of seeking bankruptcy protection on larger amounts of debt.

Don't answer the phone unless you know who it is!

If they haven't started calling several times a day, they will!

I'll show you how to stop the calls in a minute, but in the meantime, DON'T ANSWER THE PHONE, unless you know who it is.

Debt collectors are trained to intimidate and get you to pay! PERIOD!  If they can engage you in a conversation, they will try to use what you reveal to help them collect more money!

Suppose you have realtives that may be able to help you. DO NOT SAY ANYTHING ABOUT THAT! 

They need to think that you are really in financial trouble and that if settlements cannot be negotiated, then you will be forced into bankruptcy.

I'm not advocating lying, but just don't say too much! It's OK to briefly...I said BRIEFLY, explaine your financial hardship, but don't go into too much detail.  You may think it helps, but it doesn't.

You can put a stop to the collection calls.

You will need to write a letter to each collector demanding that they stop calling you.

For a FREE SAMPLE LETTER, CLICK BELOW:

STOP Collection Calls Free Sample Letter

You'll usually get better settlements during the last week of the month and toward the last week of a quarter.

Debt collectors have their budgets and target collection numbers to meet and are usually a little more willing to deal as the end of the month or quarter is getting close.

Always ask the debt collector what is the best settlement they can offer you.  Remebmer, in negotiating, usually the one who mentions a dollar amount first, loses!

When you finally agree on a settlement, GET THE AGREEMENT IN WRITING!

Don't trust a phone conversation, period! If they will not email, fax or mail the agreement, then you don't have a legitimate, professional debt collector...move on!

Make a copy of the check you mail and keep the agreement.

I've seen several cases over the years when a debt that had been settled a long time ago, showed up again at another debt collector's company.  These are usually debt buyers and have purchased a list of debts for pennies on the dollar.

Many of these so-called "debts" have no paper trail to substantiate or prove that the debt is legitimate.

Providing the settlement agreement and copy of the canceled (they cashed your check) check is proof enough that this debt had been settled.

One final thing...

Depending on your situation, you may be able to have a debt canceled and/or removed from your credit report if the debt collector cannot VALIDATE the legitimacy of the debt!

If you feel like you paid the debt off years ago, but have no proof, try sending a VALIDATION LETTER.  The debt collector must stop collection activity and provide proof that you really owe the debt. This will help:

FREE GUIDE to

OK, so there you go!  If you are persistent and follow through, it is certainly possible for you to settle your debts on your own.

But, as you can see, Do It Yourself Debt Settlement can and will be very TIME CONSUMING and challenging. 

If you try to settle your debts on your own and are unsuccessful or tired of the process, let us help.

 


 

 

Tags: debt collection, debt settlement, how to stop collection calls, debt relief in Portland Oregon, do it yourself debt settlement, hardship programs

Is "Do It Yourself Debt Settlement" Really Possible?

do it yourself debt settlement

If you have accumulated a substantial amount of unsecured credit card debt, you may be tempted to try Do It Yourself Debt Settlement.

Although it is possible, most people who are inexperienced in dealing with debt collectors end up paying much more than they should.

Why does Do It yourself Debt Settlement end up costing you more?

There are several reasons, but the most important is that debt collectors are for the most part, TRAINED PROFESSIONALS whose only job is to get as much money out of you as possible!

They don't care about your circumstances or why you have fallen behind, and since most of them are paid on commission, they can get mean when trying to get you to pay up.

Collection agencies and Law firms that deal with collections will throw around terms like:

  • LEGAL ACTION
  • LAWSUIT
  • WAGE GARNISHMENT
  • LEVY

This scares the average person into agreeing to a monthly payment plan they can't afford or a settlement for 75%-80% of the balance.  A reputable Debt Settlement agency knows how to deal with these collectors and how to get you the best deal possible.

Here is a real life example of a settlement that was just completed by our Settlement Specialists:

Our client was a single female and was unemployed for a long period of time. As a last resort, she used her credit cards to buy groceries, gasoline, and sometimes cash advances to pay her rent. 

One of her cards was a Visa Card and after charge-off was given to a collection agency.  After several unsuccessful attempts to "work something out" with the collection agency, she contacted us to find out what her Debt Relief Options were.

She decided that Debt Settlement was her best option, and our Debt Settlement specialists went to work!

The original balance was approximately $1,400, but after moving around from collector to collector , it was purchased by a "LAW FIRM".

The balance had grown to more than $2,500 as over $1,100 had been added in interest, late fees, and so-called legal fees.

After going back and forth with the collector, our Debt settlement Specialists were able to negotiate the debt down to just $700 which was 50% of the original amount but only 28% of the RIDICULOUSLY INFLATED current balance.

                                        Click Here to See the Actual Settlement Letter

Yes, it is possible for you to negotiate settlements on your own, but after 10 years of experience in helping hundreds of clients settle debts, avoid garnishment and bankruptcy, I believe in the long run the average person will end up paying much more than necessary.

If you need help settling your debts, our Debt Solutions Specialist are here to help.  

1-877-492-4109

Or simply click on the link below for a Free Debt Elimination Analysis!

 


 

Tags: debt relief options, debt settlement, do it yourself debt settlement

Do It Yourself Debt Settlement

Before you attempt DO IT YOURSELF DEBT SETTLEMENT, you may want to consider what's involved.

After many years of negotiating debts for our clients, I'd have to say for the average person trying to settle debts yourself is too hard.do it yourself debt settlement

That's not to say that you may not be able to do it yourself, but you need to understand how the process works and how the collection agents are professionally trained to get as much money out of you as possible.

For this discussion, let's talk about unsecured debts and mainly credit cards.

If you fail to make minimum payments on time, what happens?

1.  Your next statement will show an additional LATE FEE of say $35 added to the balance.  Now your minimum payment is last month's plus this month's plus the $35 late fee, and you can't afford it.

2.  You will now most likely get a DEMAND LETTER that says your account is now DELIENQUENT and demand 3 payments plus 2 late fees. Of course by now, you really cannot afford to pay.

3.  The PHONE CALLS START! Your account is transferred to the creditors internal RECOVERY DEPARTMENT or basically their collections department.

The caller may be nice or very demanding, depending on the company.

You can and should explain your circumstances, but they are usually not very sympathetic!

4. At this point (about 3-4 months delinquent) the creditor is not ready to accept a settlement for less than the entire amount including late fees and additional interest.

Oh, by-the-way, your interest rate has been increased.  There is small print on the back of the application you signed that basically states that if you fail to make payments on time, they can INCREASE YOUR INTEREST RATE.

Although the Credit Card Act of 2009 limited the UNIVERSAL DEFAULT method of increasing rates, creditors can still:

  • Increase rates
  • Charge late fees
  • Charge over-the-limit fees
  • Charge annual fees

5.  Just before the account is set to CHARGE OFF, you may get a letter from the creditor offering a settlement. 

The settlement offer may let you have 3 OPTIONS:

  1. Pay 65% of the amount due by the end of the month
  2. Pay 75% of the amount due over 6 months
  3. Pay 85% of the amount due over 12 months

You do the math! Not gonna happen!

SO NOW WHAT???

This is where "Do it yourself debt settlement" gets hard.

By now, you have been getting phone calls several times a day and possibly even at work!

The creditors may even be calling your friends and family!

There are legal ways to stop the calls.   FREE INFORMATION

The account has now been CHARGED OFF and sent to a collection agency. 

Now you starting getting calls and letters from the COLLECTION AGENCY, even though you sent out letters to the original creditor!

If the collectin agency finds out that you have a job, they may decide to FILE A COMPLAINT in your local courthouse.

You will now receive a SUMMONS that states the situation and that you have 20 or 30 days to "answer" or "contest" that you owe the debt.  But, since you owe the debt, that would be a waste of time and money (yes, is costs to file an "answer").

If you call the collection agency or attorney for the creditor, you may be able to negotiate an agreement whereby they stop legal action and if you repay 100% of the debt plus attorney fees and court costs!

If not, they will set a court date and win a JUDGMENT by DEFAULT.

With the default judgment, they can apply for a WRIT OF GARNISHMENT that your employer has no choice but to honor.

In most states, the amount that a creditor can garnish is 25% of your net (after tax) income.

Let's say you earn $$3,000 per month and 30% is withheld for taxes, etc. That leaves $2,100 after-tax income.

At 25% of $2,100, they would deduct $525 each month until the entire debt is repaid!  COULD YOU SURVIVE ON $1,575?

Not hardly, so you would probably end up agreeing to a STIPULATED AGREEMENT that would let you repay the entire amount at maybe $200/month at a reduced interest rate (each state is different).

Can a Debt Settlement Company do any better?

In most cases, yes.  Do It Yourself Debt Settlement takes a lot of time and if you are not trained in dealing with collectors and attorneys, you may end up paying too much or possibly being forced into bankruptcy.

Why not explore your options by requesting a

FREE CONSULTAION

Or Simply Give us a Call

1-877-492-4109

photo by: Henrique Vincente

Tags: debt settlement, alternatives to bankruptcy, Credit Card Debt Negotiation, do it yourself debt settlement