Debt settlement as task may not sound as tough as it may prove in deed but at times we should give it an individual try rather than taking help from the debt settlement companies or a debt settlement attorney. No wonder that the market nowadays is rich with several debt relief programs which will provide favorable debt settlement leads in order to bring the American debtors out of their financial rut; but it is always advisable for a debtor to first consult his/her own knowledge, literacy and assistance on whether he/she is capable of tackling or settling the debts individually or not. Self trial of debt settlement is always a better option as the process will save a lot of extra expense which would have been made for a debt settlement company and the same will also let the debtor have a direct negotiation with the creditor which will maintain proper communication bridge and transparency between the two parties. To start with, find out the total debt amount you owe to the creditor; it can be an individual lender, a credit card company or a financial firm who lent you money. Know the exact debt amount and the time period since when your account has been delinquent apart from knowing about the number of credit cards you own etc. After knowing all about your total debt amount along with the late fees, penalties, interest rates and other charges get in touch with your creditor or Credit Card Company or the lending firm, followed by explaining them about your incapability to afford to pay the whole balance and your intention to settle the debts incurred.
The creditor will then thoroughly review your accounts and documents of proof stating your financial crisis followed by offering you a settlement deal. However, it is not recommendable for any debtor to settle for any amount above 40% of his/her outstanding balance. If the creditor asks for a settlement above 40%, politely decline the offer. Stress that you will file for bankruptcy if you are not offered a favorable settlement. It is important that you speak with an account manager and not with any representative, while settling your debt, because an account manager has more authority to agree to a settlement. In that case the creditor will prefer to make you avoid filing for bankruptcy as in that case it would end up with no money at all. Next, specify the process of debt repayment that will favor you. If you are offered a favorable settlement, be sure to specify whether you will be paying in a lump sum or in monthly installments. Most creditors prefer a lump sum payment, but some will consider a monthly installment plan. Remember to ask your creditors to report your debts as “paid” once your debts are settled as this means a lot for the health of credit report. Keep in mind to request for a settlement agreement letter after having a verbal agreement between you and the creditor as this acts as a useful proof of the entire conversation and deal.