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Settlement or Consolidation of Your Debt: How to Get Started

By DebtSettlements.com Staff

Many consumers do not realize that they have the power to enter into a debt settlement agreement with their creditors if they have a debt load they cannot handle such as a student loan debt. Sometimes, creditors are willing to receive pennies on the dollar for debts simply because they will receive something for the debt in contrast to nothing if the debt goes into bankruptcy court.

Student Loan Debt
One of the most popular types of debt these days is high student loan debt. Many people have older type student loans with previous higher interest rates and also just unmanageable monthly payments. Student loans can be as high as $1000 a month or more depending on the type of school and amount of debt. There may be student loan consolidation programs or better loan options for you to bring down your student loan monthly payments. Fill out the form above to find out more information on reduction of student loans if it is possible in your state.

Prepare Yourself Mentally
Your creditors are not going to roll over and hand you a debt settlement offer without a fight. Make your offer, and expect them to tell you no. Do not get angry, but continue to push for what you need.

Prepare Yourself Financially
If you can get together enough cash to make a cash payment to pay down your debt, you are more likely to be successful in your endeavor. This may not be possible, and in recent economic times creditors have been more willing to work with borrowers to make regular payments, but if possible, have a lump sum ready to pay, even if you have to borrow it from a friend or family member.

Call Your Credit Card Company Call your credit card company and ask to talk to someone who has the authority to work with debt settlement. Then, make your offer. Credit card companies will not make debt settlement offers in writing. Accepting an offer over the phone is acceptable.

Keep in mind that your offer will not likely be accepted with your first phone call. The creditor is going to push to see if you have more money to offer. Keep a log of all phone calls, including the name of the person you talked to. Your creditor will have a similar log on your account.

Start Your Offer Low
If your account gets turned over to collections, your creditor stands to get back very little, often as little as a few cents per dollar. As such, start your offer low, because your creditor will still benefit substantially. Consider asking for a settlement of 25 percent or even less. If the creditor is willing, they will likely negotiate with you. The lower you start the offer, the better your final agreement will be.

If at First You Don’t Succeed
Because credit card companies will not negotiate until you are at least 60 days behind in your bills, you have little to lose by playing the waiting game. If you cannot get an acceptable debt settlement the first time you call, call again and again until someone is willing to work with you.

Of course, you will need to be flexible as well, being willing to accept the creditor’s counters to your original offer. With persistence, you should be able to cut your debt load substantially through consumer debt settlement

. If you feel uncomfortable working through the settlement of debt on your own, be willing to enlist the help of a professional debt settlement company.

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