When it comes to the most effective method for managing your bills, debt settlement is quickly climbing the ladder as the top solution. In today's economy when incomes are decreasing and costs are rising, creditors are offering repayment plans to work with their clients on getting their obligations paid even if it means a lower profit margin.

Knowing what to do and when to do it is a major advantage. When you are negotiating with your creditors, you may follow these tips and techniques so that you may talk your way into a settlement deal that pleases both you and your creditors.

Wait Until an Appropriate Time.

This may be the most important rule in negotiating a good debt settlement deal. If you approach debt settlement at the wrong time, not only could your offer be refused, the creditor could turn your debt over to a collection attorney given that they know your intent is to settle the account. Generally, 90 days late is a good time for you to mention settlement.

Get a Feel For the Creditors Willingness to Settle Your Accounts

When you’re working with the original creditor, it’s probably a smart idea to feel out their willingness to negotiate a reduction of your account before you make an offer.

As an example, you might say, “I may be able to scrape enough money in my savings account. Will you be interested in settling this matter?” You may get a range of answers. Some creditors might say they don’t settle accounts. Not true. Why would they want to spend thousands of dollars in legal fees to sue someone if they don’t have the funds to repay the debt?

Make a Counteroffer, When Necessary

Often, when creditors put a deal on the table, it’s not the lowest amount they’re likely to accept. If the debt collector’s offer is 30% or higher off the balance you owe them and you’re not ready to pay that, make a counteroffer 20%. What do you have to lose? The worst they will probably do is counter back at a higher amount. On the other hand, If you offer 40% plus and they would have settled for 20%, you just lost 20%!

Offer only What You Can Afford to Pay.

If the creditor accepts your settlement offer, you will need to be prepared to make payment on the agreement within a day or two. The offer might have an expiration date on it and if so, then you’ll have to make payment by that date to consider the settlement offer valid.

Debt settlement and debt negotiation tips may save you thousands of dollars. Without looming obligations hanging over your head, your disposable income can be used to spend it on the things that might make life far more comfortable and secure.

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