Write A Debt Settlement Proposal That Gets Results
You’re in debt and owe money to several creditors. At the rate that you’re going you’ll soon find yourself unable to make payments on what you owe. With not enough money to make payments, you’re stuck between a rock and a hard place. Here is how to get some breathing room through the debt settlement process.
Identify the debts that you want to settle. Prioritize the debts you want to settle by identifying by ranking them from greatest to least importance. For instance, you might owe money to four credit card providers. In order of your greatest to smallest debt you might owe: $11,700, $8,200, $4,700 and $1,350. Choose a debt that you want to settle and the amount that you can pay.
Determine your settlement. Out of the four sample bills, choose the one that you want to settle first. If it is the largest one, $11,700, consider the amount you might offer a creditor. Typically, you’ll start off with an offer of about 15 percent of your balance and work your way up from there. Therefore, you would offer $1,755 to settle the loan. You need to have at least that amount of money available to settle.
Write a letter. Draft a letter to your lender outlining your proposal. You should include the date, your name, address and phone number, the account number and the balance owed. Make a copy of the latest statement and attach it with your letter.
Your debt settlement proposal. Your debt settlement proposal letter should explain the reason why you are writing (to ask for a debt settlement) and your proposal to pay off the debt with less money than what is owed. Explain the reason for the settlement and why you cannot pay what is owed in full. You should ask that your amount be accepted and that the rest of the debt be marked as “paid in full.”
Make a case. As you write your letter make it known that this is your best offer. The creditor does not have to accept it and may, in fact, come back with a counter offer. A counter offer is normal, but it does not mean you have to accept it. If you can afford to pay more, then up your offer advises Phillip Bahakel & Associates.
Ask for a response. Your creditor will review your letter and make a determination based on your proposal. It is at this point that the creditor can either accept or reject your offer. If rejected, a counter offer may be provided. In your letter, ask the creditor to correspond with you by letter. Typically, you’ll receive a response within a week or two of sending out your letter.
Debt Settlement Considerations
Your chances of receiving debt settlement consideration hinges largely on your ability to carefully and politely convey your financial situation. Likely, the creditor is familiar with your financial situation — your goal here is to underscore that condition and make a case for relief.
If your initial offers is rejected, attempt to come up with a larger amount. Oftentimes creditors will accept a deal, but may require you to pay as much as half of what you owe in a bid to secure a settlement. The larger amount may also enable you to gain a better credit rating.
Once your debt settlement has been accepted, then you can start work on your other debts, using the same strategies listed here. Your efforts can pay off, but it will take hard work and patience on your part to help make it happen.
Lastly, if your creditors will not budge, you may have to nuclear by explaining that personal bankruptcy is your next step, one that would leave your creditor holding a bag with nothing in it.