Christian Debt Recovery

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December 12th, 2009 |

Author: Gavin

Write Off Debt With Debt Settlement Negotiation

Understanding how to write off debt is the first step to dealing with a serious financial situation. It is worth being clear about some of the terms we will be using here. Debt settlement is a very specific thing, which is quite different to debt consolidation or debt management. This article is about how to write off debt when you are really struggling financially and cannot afford to keep up with the repayments on your debts. This is the situation that debt settlement is designed to address and is the only situation where it is likely to work.

If you are in debt but can afford to keep up with repayments and could in fact repay the debts eventually, you will not be able to settle your debts for less than the full amount. Debt settlement is about persuading creditors to write off part of your debt and they are not going to do this if they can see that you could afford to pay them back in full. In this situation, you are more likely to be suited to a debt management plan.

If you think your circumstances are appropriate for debt settlement to work, the main options you have are whether to use a professional company to work on your behalf, or learn how to persuade creditors to write off debt for yourself. Either way is a perfectly valid option and it simply depends on how you feel about it. The clear advantage of using a professional negotiator is that they do this every day and are very good at it. In addition to this, the bigger companies will have established relationships already with most of your creditors. The fact that they are negotiating for many other people too will give them substantial leverage with the creditors, which normally means that when creditors agree to write off debt it is for a much larger proportion.

On the other hand, if you understand how to settle debt yourself, you save on having to pay anything to a debt settlement company. The only downside is that there is no way you are going to be able to achieve the same results as the professionals unless you get the right help and advice. Negotiating to write off debt is not just about playing hardball. That is almost irrelevant compared to knowing how your creditors deal with bad debts and at what point in their processes they are most likely to agree to settle.

To be effective in your negotiations you need very specific advice on what to say and when to say it. There are many different publications and systems available offering to help you learn how to settle debt, but many of them are not worth having. There are, however, a few really good ones, ranging from written guides containing template letters and phone scripts, through to full interactive courses with personal help and support.

If you prefer to leave it to the professionals, you will need to pay them for their trouble. The good companies are likely to just take a proportion of however much debt they can write off, but if you do not choose your company well, you could end up paying lots of money up front, and still end up with nothing being written off.

Not all debt settlement companies will deliver what they promise, but there are still enough well established organisations that are trustworthy and honest, with a good record of successfully helping many people. You should always apply to a few different companies anyway, so that any proposal you get can be measured against others. To be sure of using only the best companies, it is advisable to begin with a list of recommendations for well known companies, rather than just searching individual company websites.

About the Author

Find out more about how to write off debt using debt settlement and debt negotiation on the author’s Debt UK website. K D Garrow has worked as a senior manager with significant financial responsibility for the last twenty years. His website offers free, unbiased advice on a range of debt related issues, including how to get debt written off, bankruptcy, loans and budgeting.