Comments for How to negotiate debt

Comment on Have you ever settled/negotiated your debt? by nanette douglas

nanette douglas — Wed, 15 Jul 2009 15:50:12 +0000

Thanks for the the above information. When negotiating for 20-50% off of balance, will this count againt you on your credit report and will it count as a charge off?

Comment on What to do with unsuccessful debt negotiation? by ☼♫Hmm..Interesting♪☼

☼♫Hmm..Interesting♪☼ — Wed, 08 Jul 2009 23:08:59 +0000

You could try talking to someone else but just so you know....they will sue you. I was served so I've been there, done that. Fortunately at the time I had just received my income taxes and was able to pay before I had to appear in court. Have you considered paying smaller amounts of the $1000.00? At least if you did that you could stretch out the time and maybe be able to pay more when the $1000 runs out. Or you could take a smaller amount from your Mom, hire an attorney and file bankruptcy. If you have had a lot of unexpected medical expenses I would not feel the least bit guilty about doing that and it could be the best option if you are looking at long term debt that will control your life for years to come.
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Comment on What to do with unsuccessful debt negotiation? by lynnbodoni

lynnbodoni — Wed, 08 Jul 2009 22:59:59 +0000

You need to set up some sort of payment plan with them. While sometimes a creditor will reduce the debt, they are not obligated to do so in any way. Your past behavior with them and other creditors will affect how much they will knock off, and what terms will be used. Yes, some people get their debt reduced, but they have to take a big hit on their credit score when they do this.

If you’ve been paying them even token sums (such as $10 a month), that shows that you do intend to pay, you just haven’t had the money. If you have not been communicating with them until very recently, then they’re more likely to take a tough stance with you.

Basically, you owe them the whole amount, and you owe it now, since you’ve defaulted on your account. You can try to negotiate with them, but you have to give them a good reason as to why they should accept your deal.
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Comment on What to do with unsuccessful debt negotiation? by zeuz

zeuz — Wed, 08 Jul 2009 22:24:59 +0000

Tell them to stuff it.

In order to negotiate, you need to talk with someone in authority above the pinhead that you spoke to.

Make exactly one offer. Tell them, it’s a take it or leave it proposition.
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Comment on What is the best, safest debt consolidation/negotiation program out there? by Deep Purple

Deep Purple — Wed, 01 Jul 2009 21:43:59 +0000

Anyone that’s a BBB member and has a working Verisign logo will be a safe bet.
These are safe http://www.debtreliefprogram.esuperfind.com?id=th
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Comment on What is the best, safest debt consolidation/negotiation program out there? by 27ysq

27ysq — Wed, 01 Jul 2009 21:11:59 +0000

Money management international, based in Texas, but nationwide.
Used them myself and have recommended them many times.
A non profit which charges a very small fee.

Good luck
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Comment on How do you know which debt settlement & negotiation company to choose? by Jeanne R

Jeanne R — Wed, 24 Jun 2009 23:46:59 +0000

Please do not consolidate or do debt settlement. It is not free, they will lower your payments by increasing the length of time until you are debt free, and you will take a hit on your credit score. Or they negotiate your debt down after telling you not to pay for awhile adding another hit to your credit score. Student loans are the only debt that can garnish your wages for non payment without taking you to court first. Just list them out on a piece of paper or a spreadsheet and follow the plan. If you work the plan, the plan will work for you.

A. Have a garage sale and sell anything that you no longer need or want.

B.Get a temporary part time job, if you have one, get another.

Here is a plan that can help you. If you work the plan, the plan will work for you:
1. Make a budget. Make the budget a week before you get paid. A budget is not a punishment! It is a tool which will free you from ever having to worry about money again. Put everything in your budget. Especially those annual, biannual, or quarterly bills like car registration, insurance, etc. Give every dollar you are going to bring home the name of where it is going. Add an "emergency fund" category to your budget for 25 dollars and save up until you have 1000-1250 dollars. Your emergency fund will help keep you from getting into new debt because of an emergency. If you can, set up a direct transfer to a savings account for your emergency fund. That way it moves automatically and you don't even have to worry about it. You must cut your spending and live on less than you make.

2.First get current on all of you debts and make no more late payments. Stop using your credit cards immediately. Do not take on any more debt. Credit cards are like quicksand only the death is much slower. Make a list of all of your debts in order of highest interest rate to lowest interest. Use cash only for your spending from now on.

3.Pay the minimum due on all of your debts and then put your extra money towards paying off the highest interest one first. After you get that one paid off, you put the money you were paying on debt #1 (the minimum payment and the extra payment) towards debt #2. That will pay debt #2 off faster. When that is paid off, you put all three payments towards card #3 and that one will be paid off pretty quickly. As an example:

To start :
Debt #1 (highest interest): minimum payment+ extra payment
Debt #2 (middle interest): minimum payment
Debt #3(lowest interest): minimum payment

Debt #1: paid off
Debt #2: minimum payment from Debt #1+ Minimum payment from Debt #2 +extra payment
Debt #3: minimum payment

Debt #1: paid off
Debt #2: paid off
Debt #3:Minimum payment from card #1+ minimum payment from Debt #2+ minimum payment from Debt #3+ extra payment.

That way, you will get them all paid off, on time, and pay the least interest. It will also help towards rebuilding your credit since you will no longer have any late payments. This works no matter how many different debts you may have.

4. After you get all of your debts paid off, add to your emergency fund until you have 6-12 months of income saved up. Put that emergency fund money into a liquid money market fund or into a Bank of America no-risk CD so that if you need the money you can take it out without penalty.

5a. When you have your emergency fund in place, add a category for "fun" to your budget. Save for a holiday, a vacation, a big screen, or dinners out, whatever goal you want. Remember to enjoy your life.

5b. When you have your emergency fund in place, start saving for your retirement. Join the 401(k) plan at work and contribute the maximum. Your employer probably matches at least part of your contribution so why give up free money? Open a Roth IRA and contribute the maximum on a monthly basis. If you start saving for your retirement now, you will probably retire a millionaire.

5c. When you have your emergency fund in place, start saving for your next car. Only buy cars, or other things that depreciate, with cash. Save up for a nicer car. That way you get the interest instead of paying the interest.

You can do it and it isn't as hard as you think. Just follow the plan.
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Comment on How do you know which debt settlement & negotiation company to choose? by Judy

Judy — Wed, 24 Jun 2009 23:22:59 +0000

Go for a non-profit like Consumer Credit Counselling. Many of the commercial ones are basically scams, will take your money and not help you at all.

With $130K debt, depending on how much income you have, it's possible that bankruptcy will be your only real option. A legit place like CCC will tell you so if that seems to be all you can do. If you can't pay off what you owe in 5 years, that's probably what they'll tell you. They can often get interest and penalties stopped or greatly reduced going forward, and maybe even get some of the already assessed penalties abated, but they aren't going to get $130K down to $50K – RUN from anyone who says they can and will, they're just trying to scam you.
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Comment on How do you know which debt settlement & negotiation company to choose? by James R

James R — Wed, 24 Jun 2009 23:04:59 +0000

Hey Janice,

Sorry to hear that you are in such a tough place.

The first thing you need to do is make sure you choose a debt settlement company that is TASC accredited. TASC stands for, The Association of Settlement Companies, requiring businesses to follow fair and specific practices and standards.

It's also important to remember that all debt settlement and/or debt negotiation companies fees are slightly differently. Make sure that you fully understand how their fee process is set-up and you know what you are paying for. If a debt settlement company is unable to negotiation your debt they shouldn't charge you a settlement fee.

When I got into financial trouble I enlisted the help of DMB Financial. They were very fair and worked with me to settle my debt. Overall I was very happy with their services. I was able to decrease the amount of debt I owed and pay it off in far less time than if I was trying to do it on my own. They discussed all their costs upfront, what to expect and helped me avoid filing for bankruptcy. I think the biggest relief is answering the phone without having to worry about it being an angry debt collector.

I've provided DMB's link below so that you can access additional resources from their website. They are a really good company and really do help their customers get out of debt… and stay out of debt.
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http://www.dmbfinance.com/

Comment on Is there anything in it for credit card companies to reduce my interest rate? by Slimick

Slimick — Wed, 24 Jun 2009 22:43:59 +0000

If you had good credit you could get a card with a 0% (or very low) balance transfer….I don't think a mid-600s FICO score will qualify you for such a card. I think that you have to have a decent score to have a good bargaining position….i.e. If you have a 720 score with balances like you have at 20% interest, you can write a friendly letter to your banks telling them that you will happily balance transfer and close out the accounts if they cannot offer a more competitive interest rate.

With your FICO score it's tricky….If you call them and request a reduced rate…the card company could panic and close your account and/or raise your rate.

CCCS can reduce rates….but this involves being involved in their debt management program and this has some negative factors…..like you have to cut up your cards….Also, your credit report will be updated to show that you are in a credit counseling program and this can greatly affect your ability to get a mortgage or car loan.

If you don't plan on getting a mortgage or car loan in the future, CCCS might be one option to pay your debt down.

STAY AWAY from any debt reduction service you see advertised on TV.
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