Negotiating a debt settlement plan can be a better option than petitioning for bankruptcy. If you are months behind your credit card bills, then you can initiate a debt settlement plan with your bill collector personally. It shows that you are willing to pay your debts and that you are not running away from them, which what people filing bankruptcy tend to do. This will do better on your credit score as well. The sooner you start planning a debt settlement the better. Here are some tips to help you get started.
Be aware of your rights.
Bill collectors are not going to act like your best friend. They want you to pay your debts because that’s their job—to solicit payment. You don’t have to take their attack personally, but on some occasions they can become quite aggressive and even violate your rights. This is why it is important to read and research the Fair Debt Collection Practices Act. Knowing about this Act could be the difference in successfully negotiating a debt settlement plan. This way, you will have a clear view on what your rights and obligations are, and will have more idea on how to handle a pushy bill collector.
Be professional.
Always remain calm and civil when dealing with bill collectors. As with all people, respect begets respect. Your debt settlement plan must be taken seriously by the collector, so be courteous when you’re dealing with them. Flattery will not get you anywhere, but good manners do. If they see that you are treating them with proper decency, then they might be a little bit more considerate to your situation. Try to explain your circumstances in a professional manner and also explain the terms that you are prepared for, in a way that will not sound too stern or unprofessional.
Be prepared.
Your debt settlement plan is tantamount to an important business deal where your finances are at risk. You must be ready with the amount you can afford to pay on a monthly basis. You should also look at the long term impact that this decision will have on your overall finances. Keep a pen and papers handy before making the call.
Be bold, make the call.
Take the initiative and call your bill collector before they call you. They might respond coldly and be persistent on getting your location and number but be polite and explain your reason for calling. They will be hesitant at first, but be polite as always and keep your cool. If still they won’t budge, try asking for their own plan and see if it suits you. However if you can’t afford it, try making further negotiations to reach a debt settlement plan that you both agree on.
Follow these simple tips and you will be well on your way to a successful debt settlement plan. Paying your debts is your responsibility to your creditor and to yourself. If having debts means that you are stretched financially, maybe it’s time to consider other debt reduction strategies for your lifestyle and money spending habits.
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