April 26, 2010
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Who To Trust In Debt Settlement?, Pt.2
Be prepared with a strategy.If you plan on conducting your own debt settlement negotiations, begin your preparations by developing a strategy. Be prepared to handle counteroffers and possibly face legal action initiated by your credit card company or have your paycheck garnished. Know what your risks are and most importantly, what are your legal rights. With the implementation of new credit card regulations, cardholders have new protections. Prepare a budget to determine the amount of existing debt and have much your income is. This will help you determine your available amount of funds for repayment. Keep in mind that when negotiating, credit card companies may require payment in full if a settlement is reached. This could present you with an even greater challenge in gathering up enough money to do.
When conducting debt settlement, most credit card companies have their own strategies. Weigh the risks involved with the company's offer before making an immediate decision. If the company is concerned of losing any debt repayment, it will more receptive to your requests and counteroffers. The greatest risk is the possibility of your creditor closing your credit card account. However, if you agree to cease using the card until the debt has been repaid, your creditor may just freeze approval on future transactions. This arrangement works well as it demonstrates your good faith in repaying your debt.
If you are currently unemployed, you will be presented with additional risks. Creditors are quick to close credit card accounts belonging to unemployed individuals. Another double edged sword is if you are paying on time and yet struggling to make ends meet. It is not likely that a creditor will be willing to negotiate debt settlement if your account is current with a good payment history. Creditors are more receptive to settlement if the cardholder is at least two months delinquency. Lastly, get it in writing! Ask your creditor to send you a hard copy of your agreement for both to sign and notarize. You'll be glad you did.