|
If
you are serious about restoring your credit,
creditor-direct work should commence as
soon as you see your first set of credit
reports. Creditor-direct requires a lot
of time and street smarts. You will be
dealing with savvy negotiators in powerful
corporations. You will often be discouraged,
denied, and blamed, but you must not be
intimidated. Remember, if you make the same
request enough times within any corporation,
you will eventually get what you want.
Settling Your Debts
Many times we have been
asked, "Can I just delete the negative
listing without paying the debt?" In most
cases, the question comes from someone
attempting to dishonestly escape a financial
obligation. While it is true that negative
debt listings can be deleted from the credit
report - even while the debt remains unpaid -
it is also true that these listings stand
a good chance of reappearing on the credit
file sooner or later. There is a better
alternative than attempting to escape the
debt.
You
can create a true win-win situation by
settling the debt with the creditor.
It is our experience that the average
consumer settles a debt for about 75 cents on
the dollar. It is also our experience that a
professional negotiator will settle an
average debt for about 60 cents on the
dollar, including their fee. There
is rarely a good reason to attempt your own
debt settlement. Creditors will not take
you half as seriously as they will take your
attorney. Handled properly, you will save
time and money by seeking a good attorney to
negotiate with your creditors.
Understanding
the True Risks and Realities of Overdue Debts
Most consumers
overestimate the risk involved with overdue
debts. They worry about possible
repercussions such as wage garnishment and
property seizure by their creditors. When the
debt relates to a secured property,
such as an automobile or a home, the
possibility of repossession is serious, but
unsecured debts, such as credit cards
and deficiencies are much less
pressing.
In fact, very few
creditors will push all the way to a
garnishment on a relatively small
unsecured debt. Garnishment and
seizure are a creditor's most terrifying
weapons used to collect past due debt, but
they are expensive and time-consuming.
Even if the creditor went all the way to
recover the debt, they probably wouldn't
be able to recover enough to offset their
collection costs. There is little risk of
a creditor taking an unsecured debt past
simple collections.
It
is important to remember, however, that
the creditor would be in his rights
to get a garnishment and seize property,
even for a small debt. There is
some risk of financial reprisals
when a debt goes unpaid. Many consumers
fold under the perceived strain of
unpaid debts. Hundreds of bankruptcies
take place in the United States each week
for amounts under $5000.
These consumers are so
intimidated by their creditors, that they
flee to bankruptcy, even though bankruptcy
can bring total financial devastation for
at least the next ten years. If these same
consumers had simply waited, and ignored
the threatening letters and telephone
calls, they would have realized that their
creditors were all bark and no bite.
Bankruptcy is the best option for a few
consumers, but it is much over-used. And,
when a consumer files for bankruptcy,
everyone loses - especially the
creditors.
The
risks of judgments, garnishments, and
property seizures must be properly balanced
against the likelihood that such drastic
collection measures will ever happen. The
risks, and the decision to take that risk,
are entirely yours if you're in such a
position.
Which Debts Can Be Settled?
An
unsecured debt is a debt where there
is no collateral. Unsecured debts include
medical bills, credit cards, department store
cards, personal loans, collection accounts,
student loans, amounts remaining after
foreclosure or repossession, and bounced
checks. Most unsecured debts can be settled.
But, utility companies generally won't settle
for less than the full balance. There are
some few creditors, who will never
compromise, but most will take a
less-than-full payment as settlement in full
to close a troublesome
account.
Secured,
collateralized debts, such as a home or
automobile, are another story. If the
creditor can simply repossess the
property, why should he negotiate? You can
often renegotiate a short payment relief
with a secured debt, but don't attempt to
settle the account while you still possess
the property.
Also,
the creditor must have a good reason to want
to settle. If the account is paid current,
and there is no recent history of late
payment, it will be difficult to convince the
creditor that it is in their best interest to
settle. This should not be read as a
recommendation that you stop paying your
current bills. If you stop paying your
current bills, you will almost certainly make
your credit situation worse. Perhaps bad
credit is not an issue for you at this point
and you feel you must stop paying your bills
in order to settle them and get back on top
of your debt load. If this is the case,
you make such a decision at your own
risk.
Order the Full Kit and
Learn
- Proven methods of
getting the upper hand when disputing
with your Creditors.
-
Learn to use settlements to restore your
credit.
- How
to phase your approach.
- A
proven template letter to send to your
creditors that gets great
results.
Order the Full Kit
Today
|
