Reducing Your Debt With 5 Simple Steps
Reducing Your Debt
Can a debtor negotiate the debt on his or her own without hiring an attorney or a debt settlement company? Of course! Why not? Don't worry, it is a simple task. What do you need? You just need patience and courage. Let me show you how to get started.
Step 1: Analyze your debt
Do you really know the details of your debts? Refer to your loan agreement and read all the terms and conditions carefully. It is important for you to know the fees, finance charges, interest rates and terms of repayment clearly before taking any action. You need to include the annual processing fee if it is clearly stated on your agreement. Knowing the total amount of your outstanding balances is a must.
Step 2: Raise fund to pay off partial of your debt
Do you have sufficient fund to pay off your debt, i.e. at least 60% of your total debt? If you have already got the fund ready, then you can start negotiating with your lenders to request for debt elimination. However, if you don't have enough money, you are advised to look for external fund to pay off your outstanding balances. For instance, obtaining friendly loan is a smart choice as you don't need to pay high interest.
Step 3: Make your settlement request in writing
Once you have got yourself prepared, both financially and emotionally, you can start making your settlement offer. Write in to obtain your creditors' approval. Make sure the content of your letter is straightforward and well organized.
Step 4: Negotiate for the best deal
In general, the creditors normally counter offer you when they receive your proposal. You are encouraged to bargain with them based on your financial ability. Try your best to get the lowest deal if possible. While you are asking for debt reduction, you should also request your creditors to remove all the negative items from your credit file.
Step 5: Make the payment as agreed
Bear in mind that you should only make payment if the creditors have provided you with a new written agreement. The whole process is completed when your creditors report your debt as "paid in full" to the major credit bureaus.
Although not all creditors are willing to accept settlement offer, if you show them your sincerity and seriousness in getting rid of your debt, I strongly believe that they will be convinced to work with you.
About the Author
For more information about writing debt settlement letter, visit DebtSettlementLetterTips.com.
Tell others about
this page:
Comments? Questions? Email Here