The Basics Of Debt Settlement

If your account is seriously past due, don't expect the collection department to be cordial. Collectors are trained to verify your personal information, such as phone number, employment and home address. Try nicely not to provide this information. Occasionally these collectors are well versed in settlement arrangements, while others will refuse any settlement agreement. Make it clear that you are willing to make a payment, or are interested in a settlement, at the beginning of the call.

Talking with a collector who refuses to budge can be a very frustrating experience. If this happens to you, there are three options available to you:

1. Terminate the call, but do so as politely as possible. Using profane language only makes things worse. Remember, most calls are actually monitored and recorded.

2. Ask to speak to a supervisor or department manager. These individuals want to make reasonable payment arrangements or settlements.

3. Write a letter addressed to the president of the company detailing your plan to settle your account. Be very specific with regard to the dollar amount and the date(s) that you will make the payment(s).

The goal of settling an account is to get it reduced to a manageable amount. You want all late fees, finance charges and over the limit fees removed from your account. Typically, these three things will amount to 30-40% of the total balance. If a creditor is unwilling to settle within the 30-40% range, decline to make an arrangement at that time. Odds are they will send you a settlement letter within a few weeks that is more favorable to you. While this may be aggravating, waiting out the creditor may save you money in the end.

Keep a record of all of your conversations with creditors and include the date, time and the person's name you spoke with. It may come in handy later if there is a dispute over payment or settlement arrangements. Above all, don't argue with collectors or use profane language. Your phone call is often recorded and it may make creditors less likely to offer you a favorable settlement amount.

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