Steps To Settle Debt On Your Own
Channel: debtreliefusa
Date: 04/12/2013

Steps To Settle Debt On Your Own

Do you want to know the steps to settle debt on your own? It won't take a rocket scientist to do it but it is not a walk in the park either. You have to possess the right qualifications to know if you are indeed, capable of negotiating your own debt settlements.

That is step one: knowing if you qualify for debt settlement or not. Look at your debts and see if there are secured debts, court ordered judgments like child support and alimony, student loans, utility bills, and tax debts in there. These are not something that you can settle. Debt settlement can only work on unsecured credit card debt, unsecured loans and medical bills.

Once you determine that, the next step is to save money for settlement offers. This usually happens when you are unable to make your full payments anymore and would like to settle than to keep paying for years.  Sure it will lower your credit score but that is part of the sacrifice that you have to make. This is necessary to convince your creditor that you are in a financial crisis. A person in a crisis cannot afford to pay their debts, so you are on the right track.

Whatever you are not sending your creditor must be put aside to grow as your settlement fund. That is the third step: build up your settlement fund. You don't spend it on clothes or other stuff. Later on, this fund will prove to be very useful in the negotiation process.

When you start defaulting on your payments, step 4 will involve talking to your creditors - and probably debt collectors later on. You will calmly, politely and patiently talk to them to inform them that you are in a financial crisis and you cannot pay your dues anymore. They will probably say all kinds of things to get you to pay your dues. Some of them may even be insulting or threatening. Steel your heart and stick to your sob story. You can threaten them back with bankruptcy if you want. Believe it or not, they are more hesitant than you to go through bankruptcy. There is a high chance that they end up with nothing after all.

Around 4 to 6 months after you default on your payments, offer the settlement fund you had been saving. Tell them that you have this amount of money and that you are willing to send it to them - but only if they agree to forgive whatever the fund cannot pay for. That is how you negotiate for a debt reduction.

Expect that they will not agree immediately. But just be patient. When they do agree, make sure you will not send the payments until you have in your hand a signed document that proves the creditor or debt collector will forgive the remainder of the debt that your settlement fund cannot cover. You continue this process until all of your accounts are settled and you are debt free. 

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