Ways to Approach Debt Settlement
The United States has mountains of debt – $22 trillion to be exact, according to the Daily Signal. As citizens of this nation, we carry our fair share of debt as well. While the country’s debt will continue to rise, we have to take measures to reduce our amount of personal debt so we can gain credit to make major purchases such as homes and cars. Unfortunately, debt is a strain on many families, so they try to avoid thinking about the debt or “wish” the debt away. This is not a good way to deal with the reality of debt, and often results in worse situations. Today, our debt settlement attorneys will show you ways to approach debt settlement so you can continue to live your American dream.
What is debt settlement?
Debt settlement is a process of negotiation. The process involves asking a creditor such as a credit card company to accept less than what is due on an account to resolve the past-due balance. With the below approaches you’ll be on your way to settling your debts and avoiding bankruptcy in no time.
- Review Your Budget
Before you can even speak with a creditor, you need to know how much you can afford to pay back. To do this, you’d need to prepare and review your household budget. And, if you don’t have one, you should establish a household budget immediately.
Doing so will show you the areas where you’re spending too much money or where you can afford to scale back. If you do this prior to speaking to the creditor, you’ll avoid offering more than you can afford.
- Contact the Creditor.
Pick up the phone and call the creditor. Explain your situation and ask to speak to a manager if necessary. If, after reviewing your budget, you’ve determined that you can afford to pay back 25% of the debt, let the creditor know and see if they will accept the offer.
Depending on the situation, the creditor may accept your offer, decline the offer or even counter the offer. And, the creditor may request to automatically withdraw an agreed upon amount of funds from your account each month until the debt is settled.
Contacting the creditor can open the door to several situations, and as a debtor, you should be prepared for the outcome. Just think that it never hurts to ask for a settlement. But, if the creditor does accept your offer over the phone, take this step.
- Put the Agreement in Writing and Send Via Certified Mail.
The agreement you arrange with the creditor must be in writing. Do not wait for the creditor to send a letter to you, because you should be your own advocate in this case.
Be sure to list the full amount due, the frequency of the monthly payments, if any, and the total sum of the amount to be paid. Also include the last four digits of your bank account that the creditor will use to withdraw funds from.
- Request Creditor to Update Account Status with Credit Agencies
Also, in the process of the phone call, ask the creditor to change your account status with the credit agencies from delinquent to paid as agreed. This will have a profound effect on your credit report.
Remember to include this in the letter that you write to the creditor as well. In the event of breach of the arrangement, you should get an experienced debt settlement attorney involved immediately.
Contact Our Experienced West Palm Beach Debt Settlement Attorneys
If you need help negotiating your debt settlement with a creditor, contact the West Palm Beach debt settlement attorneys at Kelley, Fulton & Kaplan. We will speak to the creditor on your behalf and help you reach a favorable negotiation. Contact us for a consultation at 561-264-6850 to learn more.