Probably the hardest part dealing with liabilities is learning how to negotiate debt settlement.
Although a person could easily calculate how much they owe and how they are capable of paying, creditors aren't always open to payment suggestions.
This is why debtors need to be both careful and persuasive when pursuing settlement of obligations.
What is debt settlement? Prior to learning how to negotiate debt settlement, first discuss what this is.
Settlement is an aggressive form of consolidation wherein a person would be paying for less than their outstanding liabilities.
This is deemed "aggressive" mainly because settlement is usually a last ditch effort before going into bankruptcy.
The action also has a huge negative impact on the credit rating and would stay there for the next seven years.
What is good about this though is that it provides the individual with the chance to clear their slate and start fresh.
Figure out the Amount of Debt The first and most important tip on negotiating for debt reduction and eventual elimination is by calculating exactly how much needs to be paid.
Note that there is a Statute of Limitations to liabilities and this may differ from one state to the next.
Debtors are advised to find out exactly how long their state is and if it is applicable to any liabilities they may have.
Contact the Creditor For a first contact, it is best if the debtor calls the company rather than sending them a letter.
Although getting it all in writing should be done later, a phone conversation would provide better room for explanations.
Be aware that for cases like this, being transferred to higher ranking employees is only normal.
Make sure to explain the situation in great detail and provide them with the amount owed and the amount that can be paid.
Once the financial analyst agrees to the situation then proceed to getting it in writing.
Settled debts can be paid either through a lump sum or via monthly payments.
No matter what the decision is, make sure that this is clearly indicated in the letter of request.
Wait for a confirmation letter from the creditor before starting payment, otherwise the money may not be recognized as part of the settlement.
How to Negotiate Debt Consolidation - Debts that can Be Settled Practically all types of liabilities can be settled but the ones with the highest chances include: - Credit cards - Medical bills - Personal loans - Student loans - Auto loans - Home loans Of course, those aren't the only steps on the negotiation process.
The best way to handle the situation is through professionals.
Advisors and financial planners are more adept in dealing with creditors and could therefore command a higher chance of acceptance.
In some cases, a financial advisor could also help suggest tips on how to negotiate debt solutions aside from settlement such as consolidation, minimum payment or even bankruptcy if the situation is too severe.
For those who have multiple obligations that they want to settle, it is best to first consolidate those loans before proceeding.
Although a person could easily calculate how much they owe and how they are capable of paying, creditors aren't always open to payment suggestions.
This is why debtors need to be both careful and persuasive when pursuing settlement of obligations.
What is debt settlement? Prior to learning how to negotiate debt settlement, first discuss what this is.
Settlement is an aggressive form of consolidation wherein a person would be paying for less than their outstanding liabilities.
This is deemed "aggressive" mainly because settlement is usually a last ditch effort before going into bankruptcy.
The action also has a huge negative impact on the credit rating and would stay there for the next seven years.
What is good about this though is that it provides the individual with the chance to clear their slate and start fresh.
Figure out the Amount of Debt The first and most important tip on negotiating for debt reduction and eventual elimination is by calculating exactly how much needs to be paid.
Note that there is a Statute of Limitations to liabilities and this may differ from one state to the next.
Debtors are advised to find out exactly how long their state is and if it is applicable to any liabilities they may have.
Contact the Creditor For a first contact, it is best if the debtor calls the company rather than sending them a letter.
Although getting it all in writing should be done later, a phone conversation would provide better room for explanations.
Be aware that for cases like this, being transferred to higher ranking employees is only normal.
Make sure to explain the situation in great detail and provide them with the amount owed and the amount that can be paid.
Once the financial analyst agrees to the situation then proceed to getting it in writing.
Settled debts can be paid either through a lump sum or via monthly payments.
No matter what the decision is, make sure that this is clearly indicated in the letter of request.
Wait for a confirmation letter from the creditor before starting payment, otherwise the money may not be recognized as part of the settlement.
How to Negotiate Debt Consolidation - Debts that can Be Settled Practically all types of liabilities can be settled but the ones with the highest chances include: - Credit cards - Medical bills - Personal loans - Student loans - Auto loans - Home loans Of course, those aren't the only steps on the negotiation process.
The best way to handle the situation is through professionals.
Advisors and financial planners are more adept in dealing with creditors and could therefore command a higher chance of acceptance.
In some cases, a financial advisor could also help suggest tips on how to negotiate debt solutions aside from settlement such as consolidation, minimum payment or even bankruptcy if the situation is too severe.
For those who have multiple obligations that they want to settle, it is best to first consolidate those loans before proceeding.