If you have an outstanding debt and have decided to attempt to negotiate a settlement for that debt, you’ll want to make sure that you get as much out of your settlement as you can. There are a few ways to get the most out of any debt settlement process, and we’ll offer some tips on that to help make the process as easy and painless as possible.
What is the Most?
In order to understand what this guide will be discussing, it’s important to understand what we mean by getting the most out of debt settlement. There are multiple factors that play into a debt settlement process, and the goal is to settle your debt at the lowest possible cost to save yourself money. Getting the most out of debt settlement means saving as much money and making the process move as quickly and easily as possible.
Planning to Settle
The first thing you can do is start to plan for your settlement. Most settlements come in the form of a lump payment. Many debt settlement companies can help you set up an account that you can deposit money into without being able to withdraw it in order to build up the settlement you’ll eventually pay your creditors. This can be difficult, as many people who are considering debt settlement might be in a situation where they can’t put money aside. However, having a larger settlement makes it more likely that you’ll be able to complete the process sooner and that your creditors will accept a settlement offer.
Additionally, you should start feeling out your creditors and looking for advice and notes from other people who have negotiated with your creditor before. You may want help with the negotiations, so when you’re in the planning stage you should also be researching different consumer and debt lawyers, and determining if any of them can offer you something that makes their payment worthwhile. Frequently these third parties are most helpful in the negotiation phase, but they can also help you set up a settlement account and plan a budget so you can contribute to that account.
Finally, you should prepare your financial records so that you can demonstrate you won’t be able to pay off the full amount that you owe. You should also have documentation for any financial hardship such as medical bills and job losses. These will help convince the company that you don’t have the necessary resources to pay your debts, and helps them come to the decision that they are better off accepting your settlement than continuing to try and collect.
Working with the Company
The next step involves approaching your creditor about settling the debt and start negotiating a settlement. The company will want to get as much money as possible, if they’re even willing to settle in the first place. This means you should expect lots of back and forth. Also, you shouldn’t expect offers that are substantially lower than your obligation. Lenders and creditors don’t want to send the message that they won’t collect the full amount that someone owes, and can’t be profitable or effectively plan their business if they frequently cut the amount of money they’re expecting to receive. That means you should be skeptical of any debt settlement company that claims to be able to resolve your debt for pennies on the dollar.
Once you complete the negotiations, you’ll have to arrange the payment for the settlement to your creditor. You’ll also have to make sure that the settlement still allows you to operate on a livable budget.
Finally, you should ensure that your creditor gives you proof that the debt has been paid in full and notifies the credit reporting agencies of this fact. This will help prevent collection agencies from trying to collect on debt that you’ve settled and serves as proof that you have no legal obligation to that debt.
As you can see, the debt settlement process can be tricky. However, with careful planning, patient research, and perhaps a bit of help from a third party, you can reach a debt settlement that works in your favor and lets you resolve your debt without having to pay the full amount you owe.