Ad Blocker Detected
Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by disabling your ad blocker.
When you are deep in debt it is often difficult to know what action to take, no matter how desperate you are to get out of it. Taking action requires some knowledge of the specific things you can do to change your situation. Many people appear to be simply ignoring their predicament, whereas they just do not understand what the options are in terms of moving forward.
Even the briefest look at any serious debt problem should tell you that one thing that will definitely not work is to hope that it will all go away. A surprising number of people simply ignore the requests from their creditors for payment. Not being able to keep up with payments is one thing, but just not paying without any explanation to your creditors is something else. Your best hope for a long term solution is for your creditors to gain some understanding of your position of hardship and to then agree to be flexible about the terms for settling what you owe.
Creditors negotiation can be done in different ways, but one way or another it needs to happen if you are to get rid of your debts once and for all. If you have a large amount of unsecured debts to a few different creditors, then trying to negotiate a reduced settlement amount is almost certainly the best approach. You can either do this directly yourself or use a specialist company to do it for you.
The process of dealing with debt through creditors negotiation is known as debt settlement and there are many companies in the US that specialise in this area of work. In the UK that specific service is not offered because debt management companies can also provide what is called an Individual Voluntary Agreement, which is a more formal way to settle debts for less than the full amount. The alternative to using one of these companies is of course to do the negotiation directly yourself.
If you use a debt settlement company to do your creditors negotiation for you, they will approach each of your creditors in turn with the aim of coming to agreements to settle your debt in full for as little as possible. A good negotiator might typically expect a settlement of this type to be for about forty to fifty percent of the full amount. With some creditors the negotiation may only take a month or so, but with others it can take two or three years. While this happens you do not make any payments to your creditors, but put money away instead in a holding account. As the amount of money in this account grows, it is used to pay for the settlements that are agreed.
If you plan to undertake creditors negotiation yourself, you will need to have some help and advice, unless you happen to be very experienced already in this field. It is not just about being tough or good at deal making. You can only hope to achieve the kind of deals that a settlement company would get if you have a thorough understanding of how your creditors operate. Knowing how these companies treat bad debt and what their policies are for loss mitigation is what enables you to time your bargaining just right to get the maximum amount written off your debt.
The incentive for dealing with creditors negotiation yourself is that you do not need to pay anything to a debt settlement company, and so can gain the most benefit from any reductions in your debts. The fees for the best settlement companies will simply be a proportion of the amount they get written off your debts, so you cannot lose out overall. However, that can still be a substantial amount when you are dealing with large debts, so if you are able to achieve the same saving yourself, you stand to gain quite a lot.
There are lots of guides available online that claim to help you negotiate with creditors, but many of them offer very little real help, being full of banal information that you could have figured out yourself. There are a few very comprehensive guides out there, from excellent e-books to interactive learning courses, so do not just opt for the first one you come across. No guide is going to really help unless it tells you exactly what to do at each stage of the process.
If you wish to go down the debt settlement company route, you should apply to at least three companies and compare the feedback you get from these. Start off by using recommended companies so that you avoid any that may not have an appropriate record of success.
Related Blogs
- Related Blogs on Creditors Negotiation – Debt Settlement Through Negotiation With Creditors
