Debt negotiation

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Debt consolidation mortgage - Tips and resources
Someone great once said that 'if it isn't the sheriff, it is the finance company'. Do you feel the same? Has the piling up of bills forced you to take several loans? Do you live in constant dread that someone would soon come to claim his money. The problem is that you don't ever seem to have the money. All you earn goes in paying the interest rate on various loans while the loan amount remains int... Read debt consolidation 1 article



Debt Management Advice
Debt Management is a fiscal solution meant for those of you on your way to bankruptcy. Getting into overburdened debt conditions is a rather mundane issue considering the fact that people today are very open to the concept of loans even for small financial tangles. Uncontrolled debt mainly arises because we take several loans at the same time for different purposes, maybe one to buy a car, the oth... Read debt consolidation 1 article



Debt negotiation
If you're in a really bad situation, and you just can't even make your minimum payments this month, don't worry. You can negotiate your debts, and pay back much less than you owe - as long as they get their debt plus interest in the end, no-one is expecting you to pay the full amount when you just can't afford to.

If you've experienced some personal financial setbacks, and you now find yourself with more financial obligations than you can handle, you may be able to get the debt relief that you need...quietly and discreetly, and without filing bankruptcy. Believe it or not, nearly every financial institution will agree to settle outstanding debts for less than what is owed if you can demonstrate a legitimate financial hardship. If you are deep in debt and currently having a difficult time meeting your financial obligations, its time to take action before bankruptcy is your only remaining alternative.

Settling your debts takes a lot of time, and many people find it intimidating. If you do it right, though, you'll be surprised at how kind your creditors (that is, the people you owe money to) can be.

Close My Account

It might feel bad, but if you can't afford to pay that credit card, you'll have to close the account - that means you can't borrow any more money with that card. To close the account, you'll have to negotiate something called a 'payment plan'.

A payment plan turns your credit card debt into a plain old loan. The company might take as much as 50% off the amount that you need to pay back. It might seem strange, but they're happy you're paying at all - there are plenty of people who just don't pay and have to be chased, costing their creditors time and money. They'd rather hear from you if you're having trouble, so don't bury your head in the sand.

It's in your creditors' best interest to take whatever you can offer them, within reason. Their alternatives are lengthy court proceedings, or paying collection agencies to come round and intimidate you. They know that your offer will probably be the only offer you make before you do something more extreme that could result in them never getting any money back.

Do It in a Letter

Phoning companies to ask to negotiate your debts isn't a good idea - it's too easy to get flustered and say the wrong thing. They're professional negotiators, and you're not. You need the advantage of having time to think, which is why you should always negotiate with them by post. Getting it in writing also means that you can hold them to what they say later on. Here's a sample letter:

"Dear Sir or Madam,

I regret to inform you that I can no longer afford to make my minimum payments of $100 per month on my credit card account with you (account number 111-222-333). I would like to request the closure of my account, followed by the settlement of the debt on a monthly payment plan. Please advise what kind of terms I could expect from such a plan.

Yours faithfully..."

The Damage to Your Credit Report

You will rarely be able to negotiate over your debts without doing some damage to your credit report. If you're willing to pay a bigger percentage of the debt, though, you might be able to persuade the creditor to say that it was paid off to their satisfaction, instead of recording that they accepted less than they wanted. It's up to you just how much you feel your credit report is worth - if you're planning on getting a big loan anytime soon, this could be something to consider.

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Debt consolidation - Do you have debt

Humans are funny creatures. We don't always do what's best for us - instead, we do what feels best at the time, and try to blank out any reasons why it might not be the best thing to do. It's called self-justification. Or just plain illogical to many. Maybe that's why there are so many people who have both savings and debts.

A Matter of Psychology

Yes, it feels better to save. Saving feels like building a foundation for your future, while paying off debt feels like throwing your money down the drain. That money is for the kids' education, or for improving your house, or whatever else - and it's in an account earning a good rate of interest. What could be wrong with that? Absolutely lots, if you have debts.

Don't Be Fooled - Here is a Real Life Factual Example

There are almost no savings accounts that offer interest rates as high as the ones credit cards charge. Here's a question: if you have $10,000 in a savings account earning 5% per year and $5,000 on a credit card at an interest rate of 20% per year, how much money do you have? After just five years, the answer is effectively $0 - your debt would have grown to around $12,500, the same amount that your savings are now worth.

You might not believe it now, but it really is much better to pay off your debt. If you used half your savings to pay off that debt, you'd be in such a better position that it's really amazing. You avoid five years of compound interest on the debt, but you still get to keep $5,000 in your savings account, earning interest - after five years, that's about $6,380.

If you'd still rather keep your savings intact instead of using them to pay off your debts, ask yourself this simple question: is your pride worth $6,380 of your family's money?

Think of Your Financial Health

When you have enough money to pay off your debt, there's absolutely no reason to keep it. Debt is for people who don't have the money, and need to borrow it. Debt costs money, and savings make money - you want as much of your finances as possible to be savings, not debts. If your savings account and credit card are with the same bank, then you're effectively paying for the privilege of borrowing your own money from them. Why would you do that?

There are other benefits to paying off your debt with savings. You'll be less stressed about your debts, and your credit report will show that you were able to pay everything back - getting you a much better interest rate if you ever need to go into debt again.

I know it can be hard. You just have to remember that any money you've 'saved' hasn't really been saved at all. It's money you should have been spending instead of making purchases with a credit card. Yes, it feels much worse to spend money thinking that you're spending away your future - but always remember that when you use a credit card to spend that same money, you're spending away your future, plus interest. Anyway, if you've got the debt, then those savings have already been spent - stop denying it to yourself.




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Debt negotiation
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