If you own a lot of money in debt to one or multiple people, paying less than you own might feel great.
It would help if you settled your debt, and for that, you might employ a debt settlement business to negotiate settlements with your creditors on your behalf.
Nevertheless, you still need to save up some amount of money to pay the company and the creditor’s fees.
Overall, working with a company for your debt settlement could extend the debt settlement process and might be costly.
Using a do-it-yourself approach to your debt settlement might have the same success and save you time and money.
- Although debt settlement can save you some money, but it could also damage your credit score and accrue extra fees.
- It is important to let your creditors know why you are unable to make payments and want to settle your debt.
- Debt settlement will take less time if you decide to work with a debt settlement agency.
Assess Your Situation
Just like with everything, you first need to start everything from scratch and look at what kind of a situation you are in.
Make a list of all the debts you have with the creditors’ names and the amount you owe, and track how late you are with your payments.
This will give you a picture as to pay who and when first.
It is important to note that if you think you can keep making minimum payments or you are not late with your debts, this might be a useful way to go forward with your debts because even though debt settlement can save you some money, it could also damage your credit score and accrue extra fees1.
Not every creditor is the same; they might have policies in shape different from one another regarding the debt settlement process and what they accept and what they don’t.
You might need to wait some time before your creditor thinks about settling, or some other creditor might not be in favor of settling at all.
There is also a chance that the creditor might sue you to collect their debts; that is why it is most probably a better idea to try to solve your debts with them first.
You can find all of this information about the creditors online or by directly talking to them.
Make an Offer to Creditors
Once you believe everything is ready and you know everything about them, and you have the money to settle your debt account with the creditor, it is now time to call them up and make an offer for debt settlement.
The creditor might also automatically send you a settlement offer in some cases, which is better if the offer is like you want it.
It is also extremely helpful to let them know why you can’t make your payment and want to settle; this might make things easier.
Agree on a Settlement Amount and Pay It
Once the agreement is ready, make the settlement, review the offer again, and make the payment that you already agreed with the creditor.
As you can see, negotiating your own debt settlement is actually not easy and might take a shorter amount of time when you work with a debt settlement agency.
You need to do your own detailed research and understand your creditors’ needs and wants.
Amit Gupta is the founder of National Planning Cycles, a company that helps startups, individuals, and small businesses with their financial planning. He has a vast amount of experience in the finance sector, having managed Google Play accounts for some of the world’s most successful unicorns. Amit is an expert in his field, and he uses his knowledge to help others achieve their individual goals.
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