|
If you are
serious about restoring your credit, creditor-direct work should
commence as soon as you see your first set of credit reports.
Creditor-direct requires a lot of time and street smarts. You
will be dealing with savvy negotiators in powerful corporations.
You will often be discouraged, denied, and blamed, but you must
not be intimidated. Remember, if you make the same request enough
times within any corporation, you will eventually get what you
want.
Settling Your Debts
Many times we
have been asked, "Can I just delete the negative listing without
paying the debt?" In most cases, the question comes from someone
attempting to dishonestly escape a financial obligation. While it
is true that negative debt listings can be deleted from the credit
report - even while the debt remains unpaid - it is also true
that these listings stand a good chance of reappearing on the
credit file sooner or later. There is a better alternative
than attempting to escape the debt.
You can
create a true win-win situation by settling the debt with the
creditor. It is our experience that the average consumer
settles a debt for about 75 cents on the dollar. It is also our
experience that a professional negotiator will settle an average
debt for about 60 cents on the dollar, including their fee.
There is rarely a good reason to attempt your own debt
settlement. Creditors will not take you half as seriously as
they will take your attorney. Handled properly, you will save time
and money by seeking a good attorney to negotiate with your
creditors.
Understanding the
True Risks and Realities of Overdue Debts
Most
consumers overestimate the risk involved with overdue debts.
They worry about
possible repercussions such as wage garnishment and property
seizure by their creditors. When the debt relates to a secured
property, such as an automobile or a home, the possibility of
repossession is serious, but unsecured debts, such as
credit cards and deficiencies are much less pressing.
In fact,
very few creditors will push all the way to a garnishment on a
relatively small unsecured debt.
Garnishment and seizure are a
creditor's most terrifying weapons used to collect past due debt,
but they are expensive and time-consuming. Even if the creditor
went all the way to recover the debt, they probably wouldn't be
able to recover enough to offset their collection costs. There is
little risk of a creditor taking an unsecured debt past simple
collections.
It is important
to remember, however, that the creditor would be in his
rights to get a garnishment and seize property, even for a small
debt. There is some risk of financial reprisals when a debt
goes unpaid. Many consumers fold under the perceived strain
of unpaid debts. Hundreds of bankruptcies take place in the United
States each week for amounts under $5000.
These consumers
are so intimidated by their creditors, that they flee to
bankruptcy, even though bankruptcy can bring total financial
devastation for at least the next ten years. If these same
consumers had simply waited, and ignored the threatening letters
and telephone calls, they would have realized that their creditors
were all bark and no bite. Bankruptcy is the best option for a few
consumers, but it is much over-used. And, when a consumer files
for bankruptcy, everyone loses - especially the creditors.
The risks
of judgments, garnishments, and property seizures must be properly
balanced against the likelihood that such drastic collection
measures will ever happen. The risks, and the decision to take
that risk, are entirely yours if you're in such a position.
Which Debts Can Be Settled?
An unsecured
debt is a debt where there is no collateral. Unsecured debts
include medical bills, credit cards, department store cards,
personal loans, collection accounts, student loans, amounts
remaining after foreclosure or repossession, and bounced checks.
Most unsecured debts can be settled. But, utility companies
generally won't settle for less than the full balance. There are
some few creditors, who will never compromise, but most will take
a less-than-full payment as settlement in full to close a
troublesome account.
Secured,
collateralized debts, such as a home or automobile, are another
story. If the creditor can simply repossess the property, why
should he negotiate? You can often renegotiate a short payment
relief with a secured debt, but don't attempt to settle the
account while you still possess the property.
Also, the
creditor must have a good reason to want to settle. If the account
is paid current, and there is no recent history of late payment,
it will be difficult to convince the creditor that it is in their
best interest to settle. This should not be read as a
recommendation that you stop paying your current bills. If you
stop paying your current bills, you will almost certainly make
your credit situation worse. Perhaps bad credit is not an issue
for you at this point and you feel you must stop paying your bills
in order to settle them and get back on top of your debt load. If
this is the case, you make such a decision at your own risk.
Order the Full Kit and
Learn
-
Proven
methods of getting the upper hand when disputing with your
Creditors.
-
Learn to use settlements to restore your credit.
-
How to phase your approach.
-
A proven template letter to send to your creditors that gets
great results.
Order the Full Kit Today |
