While debt settlement isn’t for everyone, there are circumstances in which credit negotiations aren’t effective and debts are bad enough for bankruptcy. When a debt burden splits this line, settling debts directly with a creditor may be an option. However, how you handle a debt settlement is extremely important in the outcome. In order to get the best deal, there are a few simple tips to follow:
Prepare your case- one mistake people often make when negotiating with creditors is failing to prepare. The best way to win your negotiation is to know how much you can afford to repay before you contact the creditor. Examine your financial situation and settle on a number that works for your budget.
Negotiate and counteroffer-debt settlement is nothing more than a simple negotiation between you and the creditor. Although the creditor holds the power of ultimate approval, you have the right to counteroffer to get closer to what you want. Remember that, like any negotiation, persistence is important but you also need to be flexible to compromise on a fair number.
Hire a representative-you may consider hiring a third party settlement company or a debt negotiation lawyer when dealing with creditors. These professionals are often well versed in how to negotiate with creditors and can help you secure the best deal possible.
Get it in writing-always be sure to get a copy of your debt settlement agreement. Never assume that any verbal agreement made with a creditor is valid unless you have a written letter to back it up. Make your payments according to schedule until you receive written validation of your settlement agreement in order to avoid default or penalties.