4 Strategies for Negotiating Debt Settlement

Many people do not realize that negotiating debt settlement is possible. The truth is, you hold the cards in your debt management and the collector has to work with you. Therefore, there are a number of things that you can do to save yourself some money. Let's look at a few tips that you should keep in mind when you want to settle a debt.

1. Statute of Limitations

One thing that most people don't realize is that there is a statute of limitations on collecting debt. Each state has its own rules and regulations on the matter and it can affect how much you can negotiate. You need to do some research and figure out what the statute of limitations is for your particular state. Once the debt is past this point, they can no longer attempt to collect it from you. Therefore, the debt collectors want to do everything they can to settle it before this point. If you are getting close to the limit, you have more of an upper hand than they do.

2. Talk Totals

The thing you want to keep in mind is that you need to deal with the total debt. A lot of debt collectors will try to set you up on a payment plan and add in a finance charge or late charge. You need to tell them that you don't want a payment plan and you want them to eliminate any late charges. You can get a better settlement if you just pay it all off at once. Therefore, you need to ask them what is the lowest amount they will take if you pay off the balance immediately.

3. Don't Sound Desperate

Getting out of debt can be an exciting experience and you are probably ready to put it all behind you. When you get the money you need, don't rush to pay them off for the whole balance. Let them know that if they don't give you a reasonable settlement, you can wait. The longer they wait, the less likely they are to get their money. Therefore, you need to be patient and do not let them know you are desperate.

4. Look at Your Report

Many times creditors will have made negative impacts to your credit report along the way. Get a copy of your credit report and see if there is anything about this current debt. If there is, ask them to remove the statements. They have the ability to do so and if they are excited enough to get their money, they will do just that. Ask them to take off any negative comments before you give them the money. After you pay them, it is way too late. They have no incentive to help you out unless you still have their money. Your credit rating is essential to your financial life and whenever you can take measures to improve it, you should. This is one of those times.


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