This Quick Step-Step "Do It Yourself" Debt Settlement Guide Reveals "Three Keys" To Successfully Settle Credit Card Debt On Your Own, Save The Most Money & Avoid Costly Mistakes
I'm often asked, "How can I settle credit card debt myself?"
First, let's clear up a few things. Then I have three "keys" for you to follow to successfully settle your own credit card and unsecured debts...
First Things First
- Settling yourself for 2/3rds or less is typically be a reasonable goal.
- There are many strategies and factors to consider that may impact results.
- Considerable time is required to document, communicate, negotiate and follow up to achieve these results.
- There are plenty of pitfalls to avoid.
What Percentage Can I Expect To Settle My Credit Card Debt For?
Professional negotiators (including attorneys and arbitrators) average about 50% settlements (some much better than others, with the best sunder 40%), and usually charge about 15%-25% of the total debt in fees, putting the total cost to use a professional debt settlement firm typically about 65% your total unsecured debt.
The general consensus of industry professionals report "doing-it-yourself," consumers settle credit card debt on their own for about 75% on average.
Many people are unsuccessful getting any reduction of their balances at all on their own, and remain stuck with double-digit interest rates on the exhausting treadmill of slavery to credit card debt.
My close friends, however, who happen to be debt settlement professionals and found themselves in personal financial hardship during recent downturn in the economy, have achieved 10% settlements on their own credit card debt accounts because they knew exactly what they were doing and were willing to go extreme measures for exceptional results.
I've helped thousands of consumers get out of debt through debt settlement for over a decade, and most of the people I've help with a knack for communicating, negotiating, documenting and following up (the four critical skills you'll need to do this) get settlements as low as 45-60% on their own.
Why Do Debt Settlement Attorneys Typically Settle For Less Than "Do-It-Yourself-ers"?
Creditors give professionals representing a large volume of debt "special treatment" because large debt negotiators are the "bread and butter" of the collection industry. It's "business as usual" and they deal with each other every day. When a professional debt settlement negotiator comes to the table representing millions of dollars in "bulk" unsecured debt owed to a single major creditor, it creates serious leverage for the consumers represented, especially when the negotiator is an attorney from a powerful law firm. Typically, "bulk settlements" are substantially less than individuals would be able to achieve on their own.
Do-It-Yourself Debt Settlement WARNING:
Make sure you're prepared and committed to do the communicating, negotiating, documenting and following up required before you start.
Debt settlement is by no means an exact science and it's difficult for an individual lacking experience to determine if a settlement is fair or not. In addition, you have to directly handle all creditors' calls and the harassment that comes with the job. Many people are simply unable or uninterested in handling such pressure, especially with the daily demands of managing a job, household or family at the same time.
Hiring a trusted attorney with a powerful law firm may save you more money, give you better advice and get you out of debt in a much less stressful manner, enabling you to move on with your life faster. This is something you may want to consider carefully.
"Three Keys" To Successfully Settle Credit Card Debt On Your Own:
KEY # 1) The accounts must be delinquent.
Creditors will not settle for anything less than the full balance you owe on your credit card until your accounts are seriously past due. While good settlements are possible after only 60-90 days, typically settlement take place after 180 days when accounts are "charged off." This is because when creditors "charge off" an account (an accounting entry), they are taking a tax benefit on the account by writing it off as a loss. This devalues the account, and it is no longer worth the full balance owed. In fact, the normal course of business is to sell the account as "bad debt" to a third party debt collector.
STARTLING FACT: In recent years, "bad debt" was sold to collectors for an average of .034 cents on the dollar. That's only 3.4% of what you owe! Can you imagine? This means a delinquent ,000.00 credit card account is typically sold for only 0. Keep this in mind. These economics are exactly WHY debt settlement works, and can work so well for you if you do it right, because it's a better deal for creditors than any other option they have, such as a pursuing lawsuit, collection efforts or forcing you into bankruptcy.
KEY # 2) Documentation BEATS Conversation, every time.
DO NOT make any payments by phone.
Collectors will almost always ask for a check by phone. Say this:
"Unfortunately I'm unable to make a payment at this time, but I will resolve this matter as soon as possible. I understand you want me to make a payment right now, but that just isn't possible. I will have $_________ (state an amount that's roughly 25-50% of your balance, not a percentage but a round number) soon and want to settle at least one of my accounts with whoever will give me the best deal. Can you please send me an offer in writing?"
HOT TIP FOR EASY DEBT SETTLEMENT SAVINGS & SUCCESS:
You can do this initially or in response to a settlement offer that's too high... Write a "Hardship Letter." Hand write or type up a letter describing your situation, your inability to pay and include information such as, divorce, medical issues, loss of job, disability or reduced income. Any information regarding your personal hardship will help your negotiation, so don't hold back. Send this letter along with a request to settle the account for $_______ (again, a random amount roughly equal to 25-50% of your current balance).
Talking sincerely about your financial hardship, lack of income and inability to pay when requesting a settlement offer over the phone can help a lot. Think sob story, but be sincere. Still, in this game... documentation beats conversation, every time.
Track everything (documentation)... who you speak to, their name, phone number and extension, date and time. Keep everything organized in a folder, easily accessible.
KEY # 3) Use certified mail with return receipt.
Once you get an acceptable settlement offer in writing, send a check. But first... Write your account number for the account you are settling on the check and in the memo write "FOR PAYMENT IN FULL." Send the check along with a COPY of the settlement offer by certified mail with return receipt.
Once the account is paid to a zero balance, you can do the normal process of credit repair and quite possibly have the account removed through disputing it and requesting verification.
But Wait, Isn't "Do-It-Yourself" Debt Settlement Like Doing Your Own Taxes Or Dental Work?
Sure, it's possible settle credit card debt on your own. Some people are naturally good at it and even enjoy it, but most of us would rather leave it to a professional to get it done right the first time.
It's like changing your own motor oil... most people don't want to get their hands dirty, but you certainly can do it on you own if you apply yourself.
No matter what...
Make it a Priority to Be Debt Free ASAP, and Stick To It.
Because nothing feels as good as freedom, especially after being stuck in slavery to credit card debt for so long.
How Can I Settle Credit Card Debt Myself?Apply Payday Loans Online
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