Thursday, July 30, 2015

Make Settlement Offers to Creditors

July 30, 2015

Dear Cathy:

A few years back I sought out the help of Consumer Credit Counseling Agencies so I understand exactly what they do.  However, I have gotten behind on a couple of bills since receiving counseling from them.  But now I would like to go ahead and try to settle a couple of past bills and I am thinking about offering a settlement offer.  What is the best way to do this?  Settling My Debt, Ohio

Dear Settling My Debt:

It is great that you are looking at your credit.  Do not take credit lightly.  It will follow you all your life.  Contact past creditors and ask if you can settle or pay a certain amount to wipe out a debt.

For past-due debt, you can possibly negotiate a settlement offer of fifty cents on the dollar with the creditor.  For example, if you have a $2,000 debt that has been outstanding for six months, offer the creditor a $1,000 lump sum settlement to get rid of the debt.

It’s often more attractive to the creditor to receive $1,000 than payments of $20 per month for the next five years.  Be sure to ask for an immediate removal from the credit report as part of the deal, and as always get all agreements in writing.

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