Personal Finance

Debt relief – working-directly with your creditors

Many people who find themselves in debt feel that only professional credit counseling and debt relief services can help them, and this is often the case. However, it is sometimes possible for debtors to work directly with those to whom they owe money, and it is usually a good idea to at least try the do it yourself approach first.

Many people are intimidated by the idea of calling companies they owe money to and working out payment terms, but if you can get over that initial nervousness you may be able to help yourself quite a bit. Your creditors do not want you to go bankrupt any more than you do, and many creditors are willing to work with debtors to work out a more affordable way for them to pay what they owe.

How each creditor does this will vary from place to place. In some cases the creditor may lower, or even waive the interest rate, while in other cases they may be willing to settle for less than 100% of what is owed.

No matter what kind of arrangement you ultimately work out, however, it is important to get the agreement in writing. A verbal agreement simply is not good enough, and you should not begin making the agreed upon payments until you receive written notification of the agreement.

It is also important to have each creditor add a note to your credit report indicating that the debt has been paid in full. It is vital that as each debt is paid off according to the agreement you work out the credit reporting agency is notified. The written agreement you obtain should stipulate that the satisfaction of the debt will be reported to the appropriate credit reporting agency.

Do it yourself creditor negotiation is not always easy, and it will not work in every case. However, it is at least worth a try, and you may be surprised at the willingness of the creditors to work with you.

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