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If you have debt in collections that are mounting and you feel you have no way out debt negotiation may be the best option for you. You can choose to take steps to negotiate the debt with the collection agencies on your own, or you can hire a debt negotiation agency to help you complete the process.
Debt negotiation can be done for any non-federal debt that is in collections and has been purchased by a third party debt collection agency. Negotiation is possible because the debt collection agencies buy the debt for much less than it is worth. This process works for both business and personal debt!
- Are your accounts in collections?
- Are the accounts private loans/lines of credit?
- Gather all of your debt information on your tri-merge credit report.
- Make a list/spreadsheet with account numbers, debt amounts, and debt collection agency information.
- Call each collection agency to negotiate the amount you are going to pay.
- *Note* This may take more than one call. Don’t be bullied into paying on their deadlines. They will tell you the “deal” will expire if you don’t pay before you get off the phone. That is not true!
- Negotiate a payment plan if the amount is more than you can or want to make in one payment.
- Get all settlement amounts and payment schedule in writing before you pay anything!
- Set up your new budget to include your new settlement payments.
Negotiation like this is not for everyone, and that’s ok! If you don’t feel comfortable completing this process, that is what the debt negotiation agencies are here to help! Make sure you choose an agency that is there to help you step by step and checks all the boxes for you. Don’t let them pressure you into not paying bills that are not already in collections to enter them into the program as well. This will not help your credit; it will hurt your credit. Focus on the bills you have in collections and get those settled!
Another option for dealing with your debt is applying for debt consolidation. If you have debt that is in good standing and your credit score is pretty good you can apply for a debt consolidation loan. This will allow you to take all of your monthly payments and roll them into one loan. Getting a debt consolidation loan will also allow you do have a chance at a lower interest rate. Many times when you have credit card debt there are high-interest rates involved even with a strong credit score. You can apply with a credible debt consolidation company where they will assist you with rolling your debt over onto the new loan. Some companies will also assist you in negotiating any late fees as well as the interest rates, which is another plus!
Also, keep in mind these options are not limited to credit card debt! You have the opportunity to negotiate or consolidate other bills as well such as utilities and medical bills!
Tax debt with both the IRS and state taxes are other areas where you can try to help yourself or get help to negotiate the payment amounts as well as the interest rates. It is important to make sure your taxes are taken care of so you don’t have to worry about wage garnishment, having your assets levied, property seized, etc. Take control of your financial future today!