Debt Settlement Yourself
Many people find themselves owing much more money than they can realistically afford to pay back. If you can relate to this situation, then it’s highly likely that you’ve researched your options and have decided that negotiating with your creditors for reduced settlements on your credit card balances may be the best solution to become debt-free.
Do It Yourself Debt Settlement also known as Self Help Debt Settlement is a viable alternative to resolving your debt. The dirty little secret Debt Settlement Companies do not want you to know is: They charge you thousands of dollars for a service that you can accomplish yourself. Hiring a debt settlement company is like hiring someone to tie your shoes.
Getting out of debt is allot of work but, going into bankruptcy will take allot more time to get out of than your debt will. Do the math; if you really sit down and figure putting a $200.00 plus your minimum balance due and continue to pay off debts one at a time. Just keep adding to your minimum payment as you payoff debts your numbers will increase on your report sooner than you think.
The reason why you must do it yourself are numerous, including the following facts; You will be in total control of what credit card debt you want to settle and how much you want to pay for each. It is no more news that more and more creditors are refusing to work with debt settlement companies. Fees of credit card debt settlement agencies are constantly going up s and some charge high fees upfront. They falsely claim that they can dictate to the creditors sizable discounts on your debt. This is risky for you.
What Debt Settlement Companies Do
A debt settlement company claims it will, for a fee, persuade your creditors to take as little as half of what you owe to resolve your debt. Sounds good! Since you probably don’t have a bunch of cash laying around, you’ll pay the debt settlement company a series of monthly payments. First, know that typically your payments go 100% toward the settlement company’s fee until the fee is paid. Only after the fee is paid do you start building a settlement fund. When you’ve built up enough in your debt settlement account, the company will try to settle one of your debts.
Here is how these companies make money (this money should really be yours).
First, they offer a guarantee that they will settle for 50 cents on the dollar or better AND you pay nothing to get started. You simply need to give them a little bit of paperwork and then pick a payment plan and term. Your total payments will be approximately half of what you owe. The money goes into an escrow account and at a later date they will negotiate on your behalf.
So, if you want to settle your own debts, what do you need to know?
You need to be good at negotiating. You want to pay only a small fraction of what you owe. The credit card companies want you to pay all of it. Finding a compromise is not always easy. It can certainly be done. But not overnight. The negotiation process might take a while.
You can begin the process by talking to your lender about making a settlement or you can also send them a debt settlement letter. This is the first step. Some of the sample debt elimination letters I have seen on the internet seem a little unrealistic. Many of these letters request that all negative history be removed from you credit record as well as your account be reported as paid in full instead of settled for a lesser amount.