Debt negotiation is something you may need to do if you cannot make your payments on your debts. You can talk to your creditors and discuss ways that you can pay, which might suit you better than the payments you are currently due to make.
When you are having difficulty making your monthly payments, it is very important to act quickly. Many people put this off and hope the problem will resolve itself. It will not.
Do not think that nobody will notice if you miss a payment. Your creditors (the banks, credit card companies and others that you owe money to) will always notice. They have computer programs set up to alert them any time a payment is more than a certain number of days overdue. They may not contact you right away, but they know!
Sooner or later they will write you a letter, and your best chance is to contact them before that happens. That way, you have the initiative and you show that you want to talk to them. This will reassure them that you are not going to run out on your debt. But you must get in first if you can. Since you do not know when they will write, you need to contact them now. Yes, today.
The first thing to do is to make a list of all of your debts and figure out which you can pay and which you cannot. Probably there are some monthly payments that you can make without a problem.
For the others, calculate what you could pay. Do you need to reduce the payments, and take longer to pay off the loan? Or do you need a payment break this month, so you do not pay at all? This option can be good if your problem is temporary, but it is only advisable if you are sure you will be able to pay in future months.
Then call them. Make sure that you are talking to a person who has the power to approve your proposals, otherwise you can waste a lot of time. Then go through what you propose.
Usually the company is happy to negotiate with you. They may not agree to all of your suggestions but with a little flexibility on both sides you should be able to find an agreement that is acceptable to both of you. They will be happy to know that you do want to pay off the bill and you are looking for ways to do it.
They do not want to take you to court or hire debt collectors. That is an expensive last resort for them, something they will do if all else fails.
Having negotiated a variation in your agreement, the company will write to you with the new payment plan. Check it carefully, and then make sure that you make the payments on time. It is very important to do this because they will probably be watching your account more closely for a while.
If you really do not want to talk to the finance companies and banks, you could hire a debt counselor to do it. However, the finance companies will prefer to talk to you in person. So do carry out your debt negotiation yourself if you can.
Tuesday, July 6, 2010
A Review On Debt Cures
'Debt Cures They Don't Want You To Know About' is a book by Kevin Trudeau published May 2008 which claims to blow the lid off the finance industry. It is a follow up to his 2007 book, 'Natural Cures They Don't Want You To Know About' which exposed the pharmaceutical industry and medical practitioners for covering up the fact that there are simple natural treatments for many conditions that are just as effective as prescription drugs, but 'they' (the medical establishment) are constantly pushing us into becoming dependent on pharmaceutical company products.
'Debt Cures' follows the same kind of pattern in claiming that the banks and other finance institutions are virtually ganging together in a conspiracy to push the population deeper and deeper into debt so that they can make money from all of the interest that we owe.
This is an attractive idea for many people who are in debt because it takes the blame firmly away from our shoulders and lays it on the credit card and loan companies. It's not your fault - you were virtually forced into the spiral of debt that you find yourself in. That is Kevin Trudeau's argument, anyway.
We grow up accepting that it is normal, natural and even wise to be in debt. Perhaps in some cases it is. Take mortgages for example. Your parents and grandparents may have warned you about living within your means, but did they ever suggest you shouldn't take out a mortgage because you would be getting into debt? I doubt it.
For most people, a mortgage is a very good financial proposition. It often works out cheaper than paying rent, at least after the first few years, and at the end of the time you own the house. It's almost a no brainer, if you have the salary to afford it.
The problem is that most of us do not understand the difference between taking out a loan to buy an asset that will increase in value, like a house or perhaps a business, and getting credit for things that will never again be worth what we paid for them. That includes cars, furniture and all the little things that we put on our credit cards.
When you get into debt, banks will offer you more cards and loans until the point where it becomes almost impossible to pay. Then they pull the rug out from under your feet. No more loans, your cards suddenly don't work, and the credit score system makes sure that all of the other finance companies instantly know that you are a bad risk. That's where the conspiracy idea comes in.
In the end though, we could say that it doesn't really matter whose fault it is. If we are in debt then nobody is going to help us get out, that's for sure. Certainly not unless we pay them for their advice.
'Debt Cures' is a little repetitive in places, but it gives you some good ideas for reducing your debt and even eliminating parts of it. There are web addresses for internet sites where you can pick up free reports on how to reduce different types of debt. Some of the tactics he suggests are not workable in every situation but you should find some hints in there for dealing with all types of debt.
There are more comprehensive debt management books out there but this one is simple to read and excellent for anyone who doesn't know where to start. If you have not begun tackling your debt yet, 'Debt Cures' by Kevin Trudeau should give you some ideas that could quickly help you save much more than the purchase price.
'Debt Cures' follows the same kind of pattern in claiming that the banks and other finance institutions are virtually ganging together in a conspiracy to push the population deeper and deeper into debt so that they can make money from all of the interest that we owe.
This is an attractive idea for many people who are in debt because it takes the blame firmly away from our shoulders and lays it on the credit card and loan companies. It's not your fault - you were virtually forced into the spiral of debt that you find yourself in. That is Kevin Trudeau's argument, anyway.
We grow up accepting that it is normal, natural and even wise to be in debt. Perhaps in some cases it is. Take mortgages for example. Your parents and grandparents may have warned you about living within your means, but did they ever suggest you shouldn't take out a mortgage because you would be getting into debt? I doubt it.
For most people, a mortgage is a very good financial proposition. It often works out cheaper than paying rent, at least after the first few years, and at the end of the time you own the house. It's almost a no brainer, if you have the salary to afford it.
The problem is that most of us do not understand the difference between taking out a loan to buy an asset that will increase in value, like a house or perhaps a business, and getting credit for things that will never again be worth what we paid for them. That includes cars, furniture and all the little things that we put on our credit cards.
When you get into debt, banks will offer you more cards and loans until the point where it becomes almost impossible to pay. Then they pull the rug out from under your feet. No more loans, your cards suddenly don't work, and the credit score system makes sure that all of the other finance companies instantly know that you are a bad risk. That's where the conspiracy idea comes in.
In the end though, we could say that it doesn't really matter whose fault it is. If we are in debt then nobody is going to help us get out, that's for sure. Certainly not unless we pay them for their advice.
'Debt Cures' is a little repetitive in places, but it gives you some good ideas for reducing your debt and even eliminating parts of it. There are web addresses for internet sites where you can pick up free reports on how to reduce different types of debt. Some of the tactics he suggests are not workable in every situation but you should find some hints in there for dealing with all types of debt.
There are more comprehensive debt management books out there but this one is simple to read and excellent for anyone who doesn't know where to start. If you have not begun tackling your debt yet, 'Debt Cures' by Kevin Trudeau should give you some ideas that could quickly help you save much more than the purchase price.
Your Options For Credit Card Debt Settlement
Credit card debt settlement is an option that you may be able to take if you have long outstanding credit card debts where you are not making the monthly payments.
What Is Discounted Debt Settlement?
Sometimes, if a company can from its records that you have not paid anything for a while and they figure it is not likely that they will get the full amount of the debt plus interest from you, they will sent you a discounted debt settlement offer.
This means that they will write with an offer where you can pay perhaps 50% of the debt and they will write off the rest. Usually they will want this all in one payment, but if it is a large amount they may accept it in two or three instalments.
Often the letter will come from a debt collection agency. This can mean that your original lender has signed over the debt to the debt collectors, or it may simply mean that the agency is working for a percentage of whatever they can recover.
Why Do They Offer Debt Settlement?
The finance companies offer this when they can see that you are having so much trouble making payments, they might have to take you to court to get the whole amount, and maybe they wouldn't even get it then, because you might declare bankruptcy.
So they have a choice between incurring the cost of court proceedings and perhaps still getting nothing from you, or offering you this deal where you pay 50% or whatever. They figure they will be better off accepting half of what you owe, than trying to get the full amount through the courts.
What Should You Do?
Whether you should accept the offer depends on many factors.
First, you should be aware that accepting this will affect your credit score in a negative way, because you will not have paid off your whole debt. If you can pay the full amount then it is better for your credit record if you do so. However, you probably would not have gotten to the point of receiving a settlement offer if you could pay in full. Accepting the settlement offer is usually better than having court actions against you.
Second, you will need to consider how you can make the payment that they want. Does it mean that other debts will go unpaid for a couple of months? What will be the consequences of that? Would you have to miss rent payments and perhaps lose your home? Think carefully about how you can raise the money.
Third, even if you decide to accept it may be worth trying to negotiate a lower settlement. This means calling them and saying that you cannot pay what they have asked for but you could pay 40% or whatever. This is often worth trying because it can save you some money without extra penalties.
When you call, write down the person's name that you speak to. If they accept your offer, ask them to put it in writing and wait for the letter to come before you pay. Then write a letter to send with your check stating that this is full and final settlement of your debt, and ask them to write back acknowledging that the debt has been paid.
Be aware that if you decide not to accept the offer, then after a while they may take the matter to court. A court may judge that you must pay the whole amount plus the costs, so you would have a lot more to pay.
If you decide to accept, always read the small print on any offer. You need to be sure this is full settlement and they will write off any additional debt, so they have no right to come back to you in future demanding more.
When everything is complete, check out what has been posted to your credit record. If there is any mistake you should ask for it to be corrected right away and you will need to send copies of all of your correspondence. So keep all of the paperwork when you accept any credit card debt settlement.
What Is Discounted Debt Settlement?
Sometimes, if a company can from its records that you have not paid anything for a while and they figure it is not likely that they will get the full amount of the debt plus interest from you, they will sent you a discounted debt settlement offer.
This means that they will write with an offer where you can pay perhaps 50% of the debt and they will write off the rest. Usually they will want this all in one payment, but if it is a large amount they may accept it in two or three instalments.
Often the letter will come from a debt collection agency. This can mean that your original lender has signed over the debt to the debt collectors, or it may simply mean that the agency is working for a percentage of whatever they can recover.
Why Do They Offer Debt Settlement?
The finance companies offer this when they can see that you are having so much trouble making payments, they might have to take you to court to get the whole amount, and maybe they wouldn't even get it then, because you might declare bankruptcy.
So they have a choice between incurring the cost of court proceedings and perhaps still getting nothing from you, or offering you this deal where you pay 50% or whatever. They figure they will be better off accepting half of what you owe, than trying to get the full amount through the courts.
What Should You Do?
Whether you should accept the offer depends on many factors.
First, you should be aware that accepting this will affect your credit score in a negative way, because you will not have paid off your whole debt. If you can pay the full amount then it is better for your credit record if you do so. However, you probably would not have gotten to the point of receiving a settlement offer if you could pay in full. Accepting the settlement offer is usually better than having court actions against you.
Second, you will need to consider how you can make the payment that they want. Does it mean that other debts will go unpaid for a couple of months? What will be the consequences of that? Would you have to miss rent payments and perhaps lose your home? Think carefully about how you can raise the money.
Third, even if you decide to accept it may be worth trying to negotiate a lower settlement. This means calling them and saying that you cannot pay what they have asked for but you could pay 40% or whatever. This is often worth trying because it can save you some money without extra penalties.
When you call, write down the person's name that you speak to. If they accept your offer, ask them to put it in writing and wait for the letter to come before you pay. Then write a letter to send with your check stating that this is full and final settlement of your debt, and ask them to write back acknowledging that the debt has been paid.
Be aware that if you decide not to accept the offer, then after a while they may take the matter to court. A court may judge that you must pay the whole amount plus the costs, so you would have a lot more to pay.
If you decide to accept, always read the small print on any offer. You need to be sure this is full settlement and they will write off any additional debt, so they have no right to come back to you in future demanding more.
When everything is complete, check out what has been posted to your credit record. If there is any mistake you should ask for it to be corrected right away and you will need to send copies of all of your correspondence. So keep all of the paperwork when you accept any credit card debt settlement.
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