Impact Your Debt Settlement by Dealing with Collectors and Creditors

If there is one piece of debt advice that will help when collection agencies and creditors begin calling or sending written warnings, it is that you should not avoid the situation.  This is not beneficial for several reasons, but mainly it will make your situation feel much worse, and it will not help you get out of debt.  The first step is taking these calls and handling these communications head on.  Now comes the hard part.

First, known your rights under the law.  The Fair Debt Collection Practices Act is designed to help you deal with creditors and limits their actions.  They are not allowed to call within certain hours, repeatedly call with the intent to harass or threaten, call once you have told them not to, threaten arrest, and communicate with postcards.  Make sure you know exactly what the FDCPA prohibits creditors from doing and what your rights are. You can read the whole version at the FTC website.

A common tactic of collection agencies is to paint the worst case scenario so you will be pressured into acting quickly and without thought.  For instance, many creditors tell you that you can make a ?convenient and easy? phone payment if you provide your checking account information.  If you agree to this and agree to pay $50 a month on a $1000 bill, they may very well take the entire $1000 at one time.  Never give your banking information to creditors.

Creditors will most often agree to either a reduced balance in you pay in full or will let you pay in installments.  This can be your best option to pay off debt, but be aware that when the creditors call, they want to get as much as they can from you.  If you owe $1000, they want that.  But they also know that getting something, whether it is $500 or $250 is better than nothing.  It?s simple math.  Anything is more than zero.  They do not want you to know this.  They would rather get all of their money, but you should be aware that they will take significantly less if you negotiate.

Negotiating is difficult for many people:  always remain calm and keep your composure.  They are not required to play nicely and you have a better shot if you are calm, cool, and collected.  When you are sure the debt is yours and that you are, in fact, required to pay it, figure out how much you can pay and offer less.  Be persistent yet polite.  When you do negotiate a debt down, do not pay it immediately (especially by phone!).  Wait for a written confirmation of the agreement as well as the new ?paid in full? amount.  When you get this, get a bank check for that amount and make copies.  Request that the creditor relay the information to the three major credit bureaus.

Of course, an easier way to deal with the problem is to enlist the services of a debt settlement company.  Letting people who are trained for and have experience in negotiating with credit card companies removes most of the stress from you, and lets you feel more confident that mistakes aren?t being made.  Debt settlement can work for  you, but you have to make sure you get it right, or it?s just time wasted.

Books can be written on negotiating with creditors and collection agencies.  It really is worth the time to be prepared.

Learn about debt settlement, debt consolidation, debt relief, and more at Impact Debt Settlement.