Negotiating a debt settlement on your own – Steps to take

It’s a common scenario in the debt collection industry that you’re saddled with huge amount of credit card debt and you’re getting harassing debt collection calls from the collection companies. When a debtor falls back on the monthly credit card payments, it is very obvious that the credit card company will sell off the account to a third-party collection agency in order to recuperate the money. Once they take this step, you’ll find the debt collectors calling you at any time of the day. What should you do when you want to put an end to all such collection agency calls? Should you go for debt negotiation? Is it proper to take help of a debt negotiation company or should you settle your debts on your own? Well, have a look at the steps that you can take in order to settle your debts on your own.

  • Calculate the total debt amount: The first step that you have to take is to calculate the total debt amount by making a clear list of the total debt accounts on which you owe money. Take a pen and paper and jot down every single detail about the accounts mentioning the principal amount, the interest rate and the due dates on them so that you’re totally sure about the details of the amount that you have to pay.
  • Save enough money: If you’re not into the habit of saving enough money, you should incorporate this within yourself so that you don’t have to face any difficulty while making the payments to the debt settlement company. When the creditors waive off a portion of your balance, you’re left with a reduced amount and if you choose to pay in affordable monthly installments you should save money and build funds accordingly.
  • Negotiate with your creditors: Unless you negotiate with your creditors and tell them the exact reason that is keeping you from making the payments on time, the entire process will get delayed. You have to relate the credit crunch that you’re going through so that you can easily convince the debtors about revising the repayment structure of the debt accounts.
  • Start making the payments: When the creditor waives off a portion from your balance and reduces the amount that you actually owe, you have to start making the monthly payments to the company. They will accumulate this amount in a trusted account and later on disburse off the money to your creditors when the account appreciates in value.
  • Take steps to boost your credit score: As you don’t repay the exact amount that was promised to the credit card company your score will be hurt after you settle your credit card debts. If you want to become creditworthy enough even after going for debt negotiation, you should take all the required steps like building positive credit history to boost your credit score once again.

Debt negotiation is considered as one of the option for all those who feel that bankruptcy is the only option left to resolve their financial issues. Don’t forget to take all the steps to augment your credit score in the long run and become creditworthy again.

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