When You Can’t Pay

It’s a terrible feeling to have a stack of bills that you have no way to pay. Even the minimum payments would keep the wolves from the door, but you can’t even do that. You are scared, frustrated and irritable. You are losing sleep, productivity at work, and any joy in life. You see no solution. Fortunately, no matter how bad your situation may be, there are solutions, and you can now get smart and incorporate the best settlement solutions today.

How Bad is It?

First, you have to sit down and realistically look at your debt. How late are you in your payments and what hope do you truly have to get current? The creditors are calling and the late fees are mounting, so each month even the minimum payment is growing. You are probably realizing that you will not be able to get current without a lottery win or an inheritance. Given that these are not likely, you need to look at debt settlement.

For the Do-It-Your-Selfer

If you decide to tackle settlement with your creditors by yourself, you need to first educate yourself in the process. Further, you need time and stamina, as well as excellent negotiation skills to reach a beneficial resolution. But, many have done it, and you can too. Review the following and then study further.

1. Do not tell creditors or collectors that you will be paying them soon. They need to understand that you have no way to get current on this debt or they will not negotiate.
2. Tell the callers not to call you at work. If you are dealing with the original creditor, ask for lower interest rate, elimination of late and other fees, and a lower total debt amount. They may say “no” at first, but stick with it. Keep repeating that you cannot pay them and are considering bankruptcy. They will negotiate rather than face no payment at all, so this puts you in a stronger position. Some individuals have been able to achieve a 50% reduction of the total debt and a lower interest rate as well.
3. If you are dealing with a collection firm, tell them not to call you at home either. You will need to put this in writing and insist that all communication from this point forward be in written form. Send all correspondence by registered mail and keep copies. Ask for a debt validation, giving the amount of the original loan, any additional fees that have been tacked on, and sometimes, the indication of whether the debt has been transferred or sold. If transferred, the collector is working for a percentage of whatever he can collect. If the collect has bought your debt, he did so for just pennies on the dollar, and you can begin your negotiations at 35%.
4. If you do not have the stamina or skills to complete these processes yourself, employ the services of a settlement professional. There will be fees involved, but the resolution may save you a great deal of money in the long run and certainly serve to lower your monthly payment, which will now be made to the settlement agent and distributed to each of your creditors until the debt is paid.

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