The Strategy Of Negotiating Debt
The Strategy Of Negotiating Debt
By Regis Sauger
How You Present Your Financial Situation
Obviously, the more money the creditor thinks you have, then the more he will hold out for. Explain that you want to buy a new car and need this blemish removed from your credit history so that you can get approval for a loan and you will insure that a settlement will be strictly on the creditor’s terms.
On the other hand, if the creditor gets the impression that you have very little money and you are teetering on the edge of bankruptcy, then he will be less demanding. This is where an attorney can be most helpful as explained a little later.
We have helped many families with medical bills. Hard to swallow, but true. Go to the business office of the clinic or hospital and ask to discuss your bill. Make sure that you bring copies of your paycheck, rent receipts, utility bills and any information that proves how much you earn and how much you spend. These folks know that “you cannot make soup from a stone”. So, after reviewing your financial situation they almost always come up with a payment plan. IF, you do not respond and do not want to talk about your bill, you can rest assured that it WILL be turned over to a collection agency and possibly legal action.
How You Present Your Terms
There are three approaches you can take in notifying the creditor of your full intentions, pre-notification, post-notification and incremental notification. If money is not a huge factor, and you want to get things done as quickly as possible, pre-notification of terms will help you do that.
Just like it sounds, pre-notification means you tell the creditor up front that you will require the deletion of the entire negative listing as a part of the payoff. A written agreement to delete the listing and consider the debt settled must be signed before you make the payoff.
The advantage of this approach is speedy results. You won’t drag things out only to be disappointed in the end when a creditor won’t remove a negative comment.
The drawback to this approach is that you will be asked to pay a higher settlement, because you have just said in effect “My credit is very important to me.” And they will make you pay to get it back, perhaps even 100% of the amount you owe.
The other extreme is post-notification of terms. Post-notification is where you reach an agreed settlement for the outstanding balance, but you don’t mention your terms regarding how the item will be reported until you actually send payment.
How You Utilize Your Resources And Leverage Opportunities
You should have a clear idea of what you want to accomplish before you start negotiating. Always do it in writing. A telephone call just doesn’t work. When you negotiate in writing everyone has a record. Your two priorities are:
· Negotiate negative credit information off your file.
· Negotiate a settlement.
Additionally, you should also determine what you’re going to shoot for as far as status (how comments on your credit record will be worded); and, the minimum you are willing to agree to.
In other words, decide what concession you’re going after and the maximum you’re willing to give to gain that concession-and what you’re willing to give to gain a lesser concession if you cannot reach an agreement on your first choice.
A major determining factor with any negotiating strategies is financial resources. Unfortunately, most people do not have the cash to settle a lot of large accounts at one time. This means they must use more creative means to stretch their resources. One such method is to use a debt settlement schedule. A debt settlement schedule takes the amount agreed to as a full settlement and breaks it up into installments.
The purpose of the schedule is to have negative information removed from your report as soon as you begin repayment. A creditor is most inclined to accept such a payment arrangement if he perceives that you are a candidate for filing bankruptcy.
In Chapter 13 (wage earner plan), the court may structure up to a 60-month repayment. If you propose repayment over 12 to 24 months, your creditor may see that as much more attractive an offer. In all cases, discuss your options with an Attorney and then make your own choice.
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Article Source: http://EzineArticles.com/?expert=Regis_Sauger
Debt Validation Tips For Credit Repair Success By Jim Kemish
Debt Validation Tips For Credit Repair Success
By Jim Kemish
Introduction
Debt validation is a powerful credit repair tool, but like many credit repair techniques it must be approached properly to get the optimal outcome. When done right debt validation can provide wonderful results including proof that the collector has the legal right to collect and an accounting of the amount due. And there are many cases when the collector, unable to provide the documentation required, will quietly vanish from your life.
Respond to Collection Letters Quickly
Collection letters must include, or be closely followed by, a written notice including your right to dispute the debt within 30 days. It is important to know that collectors do not like to validate debt or process credit repair demands. From a collectors perspective they are playing a numbers game; they want to send out collections letters and collect money. They would rather not tangle with debtors over the details. If you do not dispute the debt within the 30 day period allowed the collector is likely to ignore your request.
Credit Repair Options
Once you have a collection notice in hand there are a couple of credit repair strategies you should consider right away. If you don’t recognize the debt you have the right to request the name and phone number of the original creditor. Collection notices are supposed to include the name of the creditor to whom the debt is owned, however in the case that the debt has been sold and resold the original creditors name may not be indicated. But if you do recognize the debt you should research the statute of limitation before going any further.
Statutes of Limitation
The statute of limitation (SOL) for the collection of a debt is the maximum period of time that a collector can file a lawsuit. To be precise, a collector can file a lawsuit after the SOL has passed, but should they do so you can have the suit dismissed on this basis. It is important to your credit repair effort to know that the SOL clock starts on the day that you first become delinquent. This means that you need to count from the first time you missed a payment in the sequence that led to the chargeoff or collection status. SOLs are state and debt type specific and are easily found on the Internet.
Negotiation Opportunities
If the subject collection is beyond the SOL you are pretty much in the clear. You can choose to contact the collector to negotiate the debt if you wish. Those looking for the best credit repair outcome may want to take the opportunity to negotiate for complete account deletion. Once a collector knows that you are aware of the SOL they should be extremely willing to settle. You also have the option of ignoring the debt. The reporting period limit will roll around and the debt will fall off your credit report. If you decide to ignore the debt and the collector continues to contact you, you may opt to send them a cease communication letter, another useful credit repair tool. Once they receive this they will stop all communications.
Validate the Debt
Assuming that you decide to validate the debt you must do so in writing. Keep your request as simple and clear as possible. As with all credit repair communications, do not go into a story or explanation. Just ask for validation of the debt. I strongly recommend that you specifically list the documents and information you want them to send you. Ask them for proof they have the legal right to collect the debt, a detailed calculation of the amount claimed owed, and a copy of your original signed contract or account agreement.
Right and Wrong Results
If a collector cannot validate the debt they should stop collecting and not report to the credit bureaus. This happy credit repair outcome occurs quite often. But it does occasionally happen that they send nothing more than an internal printout or some such thing, and then continue their collection efforts. This can make your credit repair project difficult. There is ample case precedent to support the argument that a collector must provide the documentation listed above, but you may have to go to court to get satisfaction. If you reach the point where you are ready to get into a legal battle you should consider consulting an attorney so you are fully prepared when you get in front of the judge.
Credit Repair Help
If you begin your debt validation journey on your own and find that you are confused you should reach out to a credit repair service where a professional will review your entire case, research the SOL, prepare and send the letters as needed to get the best possible results. You do not have to do it alone. Reputable credit repair services are extremely affordable and will insure that the job is done properly. Good luck!
Source: http://ezinearticles.com/?Debt-Validation-Tips-For-Credit-Repair-Success&id=2429192
Article Source: http://EzineArticles.com/?expert=Jim_Kemish
Types of Credit Card Debt Consolidation
By Graham McKenzie
There are many companies that are offering debt consolidation solutions for people with bad credit. Many consumers don’t know where to look for help with the recession hitting everyone so hard. If you have bad credit and you’re looking for a debt consolidation loan you can find one. While there are many legitimate companies out there to help you find a loan for debt consolidation there are some companies that are not legitimate and may worsen your situation. Before you jump into a loan with a company you should take several steps to ensure that you don’t end up in a scam.
The most important thing that you should know is the types of loans or services that are offered. Knowing what types of loans and services you will encounter will help ensure you pick the best one for your specific situation.
One type of loan that you will encounter is a debt settlement loan which is also known as a debt negotiation loan. The companies that offer these services will agree to handle your debts by negotiating better interest rates with lenders. This can be a great way to handle your debts and get a lower interest rate. However you should be cautious as some companies will take your money and may not even contact the lenders. This can be a serious problem which can cause you to have many late fees and your creditors may even seek collections.
The second type of loan you’re likely to encounter is a debt consolidation loan. A debt consolidation loan is a loan where you will have all of your debts combined into one loan. This will allow you to have one payment every month. However the downside to this is that the company will usually charge a fee and sometimes an interest rate of their own. This can cause you to have to pay a decent amount of money for your consolidation loan.
Finally you may also encounter a debt elimination loan. This type of service can be a very shady service as companies will charge you a fee and then give you a document stating why that line of credit is not legitimate. This is one type of service that you should avoid at all costs as you may find yourself in a potentially bad situation.
If you’re considering going through a company then you may want to try to contact your lenders yourself. You may be able to work out something with them before you invest your money into other types of service. If you decide to get a credit card debt consolidation loan then you should check the internet and the Better Business Bureau extensively to ensure that you’re not dealing with the wrong company. You can also try to get a loan from the bank or ask a banker for a recommendation. Even if the bank can’t give you a loan the banker will help you find a solution to your problem. You should always remember that if a debt consolidation loan sounds too good that you should investigate it further to ensure that it’s a legitimate deal.
Source: http://ezinearticles.com/?Types-of-Credit-Card-Debt-Consolidation&id=2474254
Article Source: http://EzineArticles.com/?expert=Graham_McKenzie
