Is it Possible to Negotiate My Debt?

transforming debt into wealth

When you have hard times getting out of debt, you often ask yourself: “Is it possible to negotiate my debt?” Of course you can! You can negotiate debt even on your own effort or through the assistance of an individual, organization or agency.

Sometimes, negotiating debt on your own is quite a difficult job. There are credit companies who do not settle personally with their debtors. This prompts you to seek the assistance of a third party to help you. However, caution is highly important when dealing with them so as to avoid debt scams.

Below are the options to negotiate your debt. These usually depend on your financial status or how far you have gone through your debt.

1. Negotiate settlements for less than the full balance

Negotiating settlements for less than the full balance is the formal way to negotiate debt. There are certain situations where most creditors will agree to accept less than full balance to settle your outstanding debt.

2. Make a debt consolidation loan

Debt consolidation means combining all your debt into one. It can be from a number of unsecured loans into another unsecured loan. Oftentimes, it involves a secured loan against an asset that serves as collateral such as your house. It has a lower interest rate but it has a higher risk of losing your house when you are not able to pay back the loan.

3. Credit counseling services

Credit counselor negotiates with creditors on your behalf to reduce your payments, outstanding balances and stop collection services from their threatening calls. These can be a non-profit organization that is funded by contributions from creditors or a profit organization that asks for an upfront free along with other additional payments. So you have to be very careful when dealing with them to avoid debt scams negotiations.

4. Bankruptcy

It is often the last option for individuals who suffer from huge debt. The effect of filing bankruptcy can appear on your credit report for up to ten years, thereby making it difficult for you to acquire new credit or loan. It also requires you to appear and attend one or more hearings at the federal court. Sometimes, a court-appointed trustee is assigned to control and oversee your financial estate.

When you cannot pay down your debt balances or when you cannot make the minimum monthly payments, this can be the right time to negotiate debt with your creditors.  You may also consider dealing with credit counseling services before trying to reach debt settlement. In any case, try to avoid filing bankruptcy.

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