There are many "credit counselors" who will take your money up front, with a promise to pay your creditors. They also take a hefty "commission" for themselves. But all too often, they don't follow through on your deal, and six months later you find out that NO bills have been paid, and you're a candidate for bankruptcy! But yet, they tell you or indirectly say to stop payment to creditors.
That's why we encourage people to settle their own debts and avoid being taken for a very dangerous ride by unscrupulous debt counselors, or debt settlement companies.
Here are some easy tips to help you start settling your own credit card debt.
Skills You'll Need
Communicate - You need to have decent verbal skills to communicate with your creditors. This shouldn't be a problem for most people - just be sure to express yourself clearly, without anger or emotions treat it like a business transaction.
Negotiate - You'll need a clear goal in mind before you make that first call. Then. realize that true negotiating involves some give-and-take. You may not get what you want on the first call. Maybe not on the second, either. You will have to compromise - just be firm but pleasant.
Document - Write down everything - date, time, person(s) spoken to, subject and any deals made. Do this for each conversation. Keep all notes in a separate notebook, for organization. (Remember we can go back for seconds later).
Follow Up - Always follow up. Complete any phone calls, perform any tasks, and if an agreement is reached, do your part. That's follow up.
While most do-it-yourselfers settle their debt for an average of about 75%, those who have the skills listed above (and use them) can get their settlement for as low as 45% - 60%. Of course, it's possible to not get any reduction. That's how important using these skills really are. Some exceptional debt negotiators have gotten away with a settlement as low as 10% ! Industry professionals (attorneys and professional arbitrators), who bring millions of dollars to the table "only" get about 50%.
The fees these professionals charge is usually around 15% of your total unsecured debt - meaning that, on average, your debts are settled for a cost of about 65% (50% settlement + 15% fee).
If you're using the (4) skills shown above, it's possible for you to walk away from the negotiating table paying as little as 45% of your debt. And, that's a great deal for you!
Your Accounts Must Be Seriously Past Due
Unless your accounts are at least 180 days past due, chances are your creditors won't make any deals with you. If you're not that far past due now, do you just wait for the 180 day mark, then get serious about your debts? NO - before you are this far past due, it is your moral (and legal) obligation to try and pay your debts as best you can.
You can always ask your creditors for a lower rate before the 180 day mark - with the promise to make good on the debt. If it turns out to be totally impossible to pay the entire debt, then save the settlement option for last.
Always Use Certified Mail
When negotiating your debt, it is extremely important that you follow the agreement to a "T." That includes any lump sum payments sent should be sent by certified mail, with a return receipt. This will only cost you a couple of dollars, but the peace of mind you get when you know for sure that your payment has been received is huge.
If your creditors "misplace" or "lose" your check or other paperwork, then the burden of proof falls entirely on you - if you can't prove that you followed through on your deal, then you may be deemed in fault and all deals canceled. You know how difficult it is when working with a large company - that's why it's so important to be sure you have all of your bases covered.
When sending in a check, be sure to include a copy of the agreement in your certified mail.
Can you really settle your own debt?
Definitely, you can. You will have to learn some new skills, and be prepared for lots of ups and downs along the way. The path may not be smooth, but you've got lots of access to help - your local library, for instance.
The key to settle credit card debt yourself is to take action - now. Your debt will not go away by itself. In fact, no matter how dire things seem now, they will get much worse if you procrastinate. So, don't put this off - get organized and take action to help yourself, today. When it's all said and done, you'll look back and have few regrets. The only real regret you'll have is if you do nothing! Check out our forums for more information or questions.