http://www.pnwaug.org Thu, 10 Mar 2011 15:01:52 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 http://www.pnwaug.org/how-to-avoid-bankruptcy-get-out-of-debt-faster-using-debt-negotiation http://www.pnwaug.org/how-to-avoid-bankruptcy-get-out-of-debt-faster-using-debt-negotiation#comments Wed, 23 Jun 2010 08:31:57 +0000 admin http://www.pnwaug.org/how-to-avoid-bankruptcy-get-out-of-debt-faster-using-debt-negotiation

Has credit card debt got you thinking about bankruptcy?

You’re not the only one these days. Even with the new bankruptcy laws, credit card debt continues to climb. Unfortunately for most of us, our paychecks don’t climb as quickly.

If you’re on the verge of bankruptcy, you may have another alternative.

Debt negotiation is a process where you negotiate with your creditors to pay off your debts at a reduced amount – for example, if you owe $12,000, you can negotiation a payoff of $5,000. The benefit for the creditor is that they get more money than they may have through bankruptcy, and they get the money sooner. The benefit for you is obvious – you get out of debt faster, and save lots of money in interest.

Where do you get the money to pay off the debt?

Take the money you would have normally used to pay your credit card bills, put it aside, and when you accumulate enough to pay off the debt, send in the reduced amount you agreed to.

If this sounds confusing, that’s ok. It’s really not.

There are many professional companies that will do all the work for you, and charge you a percentage of the savings.

I can speak from experience (I built up a lot of debt trying to start a sporting goods business, which didn’t quite work out) that even with the fees, this is a good deal – plus you save a lot money by not having to pay the high interest rates on your credit card bills.

Sure, it is a more aggressive approach to getting out of debt than making minimum payments, using credit counseling, getting a debt consolidation loan, or borrowing from a friend or relative. But in the end, you’ll get out of debt faster…

And avoid bankruptcy!

If you’ve never heard of debt negotiation (also called debt settlement), that’s ok too, not many people have. I didn’t until I began to seriously consider bankruptcy.

One reason many people are hesitant to consider debt negotiation is that it goes on your credit report. Sorry to tell you, but having lots of debt (even if you pay on time), making payments late, even credit counseling – all go on your credit report and can negatively effect your credit. And (of course) bankruptcy is a big negative!

In my case, getting out of debt, removing all the financial stress, and being able to live a normal life were well worth it. With so much debt, having good credit was meaningless anyway.

Plus, I was able to get all but one of the negative items off my credit report (that’s a topic for another discussion), and my credit is now back to normal. In fact, I now get more credit card offers than I can handle – and fortunately, I can now throw them all in the trash!

When money is tight, and debt is high, there aren’t many simple answers.

But if you are already considering bankruptcy, then debt negotiation might be the right alternative to help you get out of debt faster!

By: Kris Bickell

]]> http://www.pnwaug.org/how-to-avoid-bankruptcy-get-out-of-debt-faster-using-debt-negotiation/feed 0 http://www.pnwaug.org/eliminate-unsecured-debt-how-to-avoid-bankruptcy-and-negotiate-a-settlement http://www.pnwaug.org/eliminate-unsecured-debt-how-to-avoid-bankruptcy-and-negotiate-a-settlement#comments Sat, 13 Mar 2010 14:50:34 +0000 admin http://www.pnwaug.org/eliminate-unsecured-debt-how-to-avoid-bankruptcy-and-negotiate-a-settlement

Most consumers are unaware of the fact that they can attempt to eliminate unsecured debt. They are simply ignorant of the fact that credit card companies do negotiate if it is beneficial for them. You can convince them to eliminate your late charges, reduce interest rates or excuse you from paying annual membership fees. If you are unable to make your regular payments, they also agree to settle by letting you pay less than the actual amount. When a debt collector gets back to you saying their policies do not allow debt settlements, just don’t give up persuading. It doesn’t matter if there is a lawsuit already filed or the account is in collections.

Try to eliminate unsecured debt keeping in mind that credit card companies survive in a very competitive market. These companies also value their clients, as obtaining new clients is always tough. If you have been regular with your payments, go ahead and re-negotiate the initial terms mentioned in your contract.

However if you are already lagging in payments and are in no position to pay back the amount you owe, debt settlement is a good idea to eliminate unsecured debt. It can save you from filing bankruptcy and you can negotiate and pay off your debt by reducing your debt amount as low as possible. Another important tip, the longer your account is in collections, the better are your chances to negotiate effectively! Credit card debts are most common form of debt settlements. But even bounced checks, medical bills, personal loans, etc. are eligible for settlements.

It is easy to get a debt settlement if the debtor can afford to pay 30%-60% of the total amount. If you want the creditors to settle for any amount that is lesser than the total, it is advisable to offer it in lump sum. If you own a home, you can opt to refinance and use the home equity for settling the debt. Or you can sell some other asset; borrow the money from a close friend or think of some other suitable alternative. In case you cannot raise the money immediately, don’t think it impossible to eliminate your unsecured debt, as your creditors may let you pay the negotiated amount over a certain period of time.

By: Sankalan Baidya

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