you are serious about restoring your credit, creditor-direct
work should commence as soon as you see your first
set of credit reports. Creditor-direct requires a
lot of time and street smarts. You will be dealing with
savvy negotiators in powerful corporations. You will often
be discouraged, denied, and blamed, but you must not be
intimidated. Remember, if you make the same request enough
times within any corporation, you will eventually get
what you want.
we have been asked, "Can I just delete the negative
listing without paying the debt?" In most cases,
the question comes from someone attempting to dishonestly
escape a financial obligation. While it is true that
negative debt listings can be deleted from the credit
report - even while the debt remains unpaid - it
is also true that these listings stand a good chance
of reappearing on the credit file sooner or later. There
is a better alternative than attempting to escape the
can create a true win-win situation by settling the
debt with the creditor. It is our experience that
the average consumer settles a debt for about 75 cents
on the dollar. It is also our experience that a professional
negotiator will settle an average debt for about 60
cents on the dollar, including their fee. There
is rarely a good reason to attempt your own debt settlement.
Creditors will not take you half as seriously as
they will take your attorney. Handled properly, you
will save time and money by seeking a good attorney
to negotiate with your creditors.
the True Risks and Realities of Overdue Debts
consumers overestimate the risk involved with overdue
worry about possible repercussions such as wage garnishment
and property seizure by their creditors. When the debt
relates to a secured property, such as an automobile
or a home, the possibility of repossession is serious,
but unsecured debts, such as credit cards and
deficiencies are much less pressing.
fact, very few creditors will push all the way to a
garnishment on a relatively small unsecured debt.
Garnishment and seizure
are a creditor's most terrifying weapons used to collect
past due debt, but they are expensive and time-consuming.
Even if the creditor went all the way to recover the
debt, they probably wouldn't be able to recover enough
to offset their collection costs. There is little risk
of a creditor taking an unsecured debt past simple collections.
is important to remember, however, that the creditor
would be in his rights to get a garnishment and
seize property, even for a small debt. There is some
risk of financial reprisals when a debt goes unpaid.
Many consumers fold under the perceived strain
of unpaid debts. Hundreds of bankruptcies take place
in the United States each week for amounts under $5000.
consumers are so intimidated by their creditors, that
they flee to bankruptcy, even though bankruptcy can
bring total financial devastation for at least the next
ten years. If these same consumers had simply waited,
and ignored the threatening letters and telephone calls,
they would have realized that their creditors were all
bark and no bite. Bankruptcy is the best option for
a few consumers, but it is much over-used. And, when
a consumer files for bankruptcy, everyone loses - especially
risks of judgments, garnishments, and property seizures
must be properly balanced against the likelihood that
such drastic collection measures will ever happen. The
risks, and the decision to take that risk, are entirely
yours if you're in such a position.
Can Be Settled?
unsecured debt is a debt where there is no collateral.
Unsecured debts include medical bills, credit cards,
department store cards, personal loans, collection accounts,
student loans, amounts remaining after foreclosure or
repossession, and bounced checks. Most unsecured debts
can be settled. But, utility companies generally won't
settle for less than the full balance. There are some
few creditors, who will never compromise, but most will
take a less-than-full payment as settlement in full
to close a troublesome account.
collateralized debts, such as a home or automobile,
are another story. If the creditor can simply repossess
the property, why should he negotiate? You can often
renegotiate a short payment relief with a secured debt,
but don't attempt to settle the account while you still
possess the property.
the creditor must have a good reason to want to settle.
If the account is paid current, and there is no recent
history of late payment, it will be difficult to convince
the creditor that it is in their best interest to settle.
This should not be read as a recommendation that you
stop paying your current bills. If you stop paying your
current bills, you will almost certainly make your credit
situation worse. Perhaps bad credit is not an issue
for you at this point and you feel you must stop paying
your bills in order to settle them and get back on top
of your debt load. If this is the case, you make
such a decision at your own risk.
the Full Kit and Learn
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