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Debt Settlement Offer – 11 Things You Need to know
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It may be in your best interest to take advantage of these offers.

Here are 11 tips to get started.

1. Make sure you owe the debt by first “validating” the debt

2. Don’t contact the creditor or collection agency until you are ready to negotiate (and pay) a settlement offer. Attempt to reach a settlement for 20% to 50% of the original debt.

3. When you call the collection agency, get their physical address, direct line and fax number. Follow up all phone conversations with a written letter.

4. Be sure to keep good records of who you talked to (and their supervisor), what you agreed upon, and other terms of the settlement offer.

5. Always get your terms in writing before you even consider making a payment. Never expect a creditor to uphold a verbal agreement.

6. The older the debt, the less the collection agency expects to recover.

7. It is not wise to make arrangements for a “payment plan” to a collection agency. Extra interest or handling fees could be added to your balance, making it even harder to pay the balance down. In some cases, making payments could even restart the Statue of Limitations. Wait to contact them until you are in a position to make a lump sum payment.

8. Send any and all correspondence to the collection agency via registered mail with a receipt request. Keep a copy for yourself.

9. Penalties and extra interest are typically amounts added on by the collection agency to boost their profits. Most companies will agree to waive the added fees if you pay the debt.

10. Never look too eager to settle, or let the collection company know that you are buying a home, car or anything else. If you appear too eager, the creditor will insist on a higher payment, after all they know how much you need to settle. Likewise, be honest about how much you owe and how much you can pay. Remember, the collection agency has access to your credit report and can see your other debt. Take your time to reach an acceptable offer.

11. Once the debt is paid, the deal is over. Be sure that you have included all of your terms, including how the item should (or should not) appear on your credit report.



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About the Author

Mark Bustamonte, Financial Education Servcies
1955 N University Dr
Pompano Beach, FL 33071
954-707-2932

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