Credit settlement - 4 Tips To preparing for a Credit settlement
Settling card debts for pennies on the dollar takes cash, patience, and knowledge. This technique is one of the most powerful ways to get creditors and collection agencies to stop calling you and to remove negative items from your credit report. You have something creditors want, and that is money. But, in order to interact with card companies, you must also possess the right communication skills in order to win. Once you master the following tips on debt settlement, you will be able to take your credit worthiness to a whole different level.
Credit settlement tip 1 - Determine which account should be settled first?
Before contacting the lender, review your report to determine which accounts should be negotiated. Look for charge off accounts, debts that have been sold to a third party collection agency and old judgments.
Credit settlement tip 2 - Look at the Statute of limitations on the debt first
The statute of limitations is critical because you may be paying for an old account that has passed a deadline and is getting ready to fall off your report. Take a look at the date the account went delinquent and then look at the federal statute. If the statute has expired, it's time for the negative item to come off of your report. Now, view your outdated accounts again focusing on the date of last activity. Review your state statute to see if your debt has expired. If so, the lender can't collect by way of suing you for a judgment, but they can still continue their collection efforts.
Credit settlement tip 3 - Make the creditor prove that it's your debt first
Right before you settle, write the lender a letter asking them to provide you with written proof that you owe the money. Ask them to send you the original application bearing your signature. Federal law requires creditors to provide proof upon request by the consumer. Give the them 16 days to respond to your request. If they don't write back, send the creditor bureau a letter asking for a deletion because the creditor can't prove that you owe the money. Write the attorney general's office in the creditor's state, and let the attorney general know that the card company is reporting negative information on your bureau report even though they can't prove that you owe the debt.
Credit settlement tip 4 - Learn what account could be settled
The easiest bills to settle are unsecured accounts like medical bills, credit cards, retail store cards, personal loans, old collection accounts, outdated judgments, and charge offs. The reason why you can negotiate these accounts is because the lenders have no collateral against them if you decided to default. Secured accounts like your home and car are almost impossible to settle since the lender has a lien on the property, but you can settle the deficiency amount if the car is taken or the house goes into foreclosure.
As you can see getting ready to settle a debt takes time and effort on your part. However, just by applying the four tips above will prepare you for the negotiation game. To creditors, it's who has the best skill when it comes to negotiations. Now that you are empowered with more education, go out there, and settle your bills for pennies on the dollar.
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