When people hire debt settlement agencies to deal with outstanding balances, it is usually for two reasons. The first reason is because debt can be so overwhelming that many consumers have difficulties facing the situation on their own. The second reason people go to debt settlement companies is because they essentially fail to understand that all consumers have the power and the tools to settle debts on their own.
What Does DIY Debt Settlement Involve?
The first thing you need to do when attempting to settle debts is to get prepared. Preparation is not very difficult but it does take some time, effort, and follow through on your part. Organization is also a key ingredient.
To get started, you need to gather your creditor statements and your budget information. In order to settle your debts effectively, you need to know how much you can afford to pay based on what you owe. Once you have an estimate of how much of the debt you are able to cover, you can get on the phone with your creditor. You should have a notebook and a pen at the ready to make notes on the details of each conversation.
Contact the creditor by phone, noting the time you called. Ask to speak to a manager who likely has more authority to negotiate terms with you than a phone representative might have. It will save you some time and frustration to ask for help immediately. Once the manager is on the line, explain your present financial hardship and your desire to settle. You can quote an amount less than you are willing to pay to get negotiations started. If the manager agrees at your initial offer, make sure to request written confirmation of the debt amount and clarify how long the offer may stand. The creditor may require the settlement amount be paid immediately. You do not have to be bullied into the paying funds you can’t presently afford but if you can finalize the payment, do so. In addition to the request of confirmation of the debt settlement agreement, be sure to inquire of the creditor how the settlement will be reported back to the credit reporting bureaus. You can try to negotiate a better credit rating but it’s likely they will not agree.
If the manager does not agree to settle for the amount you suggest, work on continued negotiations. If you fail to come to a compromised settlement arrangement, thank the manager for their time and disconnect. You may not be able to settle with this creditor now so move on to the next one and repeat the process.
Staying On Task
In some cases, one call will not perform miracles. You may need to make several calls, confirm correspondence, track call details, and overall continue to follow up and follow through until the settlement is complete. Never trust the creditor to do as they say they will. It is your duty as an account holder to make sure the debt obligation is a closed case. Make sure you have verifiable proof from your creditor about the arrangement in the event the creditor tries to pursue you for the forgiven balance in the future. There is a slim chance this will happen but if it does, you’ll want to be prepared.
Benefits of DIY Debt Settlement
The reality of handling debt settlement on your own is that it is a task that can be difficult to get started. Many will delay or avoid the task entirely out of embarrassment or the feelings of being overwhelmed. If it seems to be too much for you, contact a debt settlement agency for help. Otherwise, you just need to get on the phone and get the process started. Once you begin to see results of your hard work, it can be motivating enough to keep you going.
In addition to the personal satisfaction of facing your debts head-on, you also have the financial advantage of saving the fees of dealing with a debt settlement agency. You will have more money to put towards relieving debts and starting off your savings goals on the right foot.
DIY debt settlement isn’t for everyone but it is within the power of every consumer to handle their financial hardships on their own. You can eliminate the burdens of debt through settlement and there is no better time to get started than today.
Frank Collins is a seasoned writer with strong background in both personal and business finance. You can read more of his articles about debt relief options, bankruptcy and related services at the debt settlement blog.