Do It Yourself Debt Negotiation

Learn To Negotiate Debt

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Debt Negotiation Guide:

Stage One
Contact Creditors

Stage Two
Prioritise Creditors

Stage Three
Financial Statement

Stage Four
Make Offers

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Do It Yourself Debt Negotiation – Help and Advice

Go Straight To The Recommended Debt Negotiation Guides

See Also: Advice On Using Debt Settlement Companies

Do It Yourself Debt Negotiation

A widely used and highly effective solution to debt problems can be to settle debts through negotiation. Whether you do it yourself or use a specialist company or scheme to do it for you is entirely up to you, as there are pros and cons with each option. The main thing with do it yourself debt negotiation is to ensure that you have effective advice and clear instructions, otherwise you are not likely to be successful.

In the US there is an extensive industry offering to undertake debt settlement negotiation on your behalf. In the UK that precise service does not really exist. This is mainly because UK residents in the same type of serious debt situations that would be appropriate for debt settlement in the US can use a debt solution only available in the UK, called an IVA. This is an individual voluntary arrangement, and can result in getting up to 75% of your debts written off.

For the purposes of this article, when I mention the use of professional debt Settlement companies, this only relates to the US.

Whoever does it, debt negotiation will only work in certain situations, so I would first of all just like to clarify which options are available in which situations for the UK and US:

Debt Options – UK Residents

Debts Under £15,000:

If you have a steady income and can afford a reasonable monthly payment towards your debts, you should consider a debt management plan.

If you are in genuine hardship and do not have sufficient income to afford the payments on a debt management you should consider do it yourself debt negotiation.

Debts of £15,000 or more:

If you have a steady income and can afford a reasonable monthly payment towards your debts, you should consider a debt management plan.

If you are in genuine hardship and cannot afford to keep up with repayments on your debts, you should consider applying for an IVA, or try do it yourself debt negotiation.

Debt Options – US Residents

Debts under $10,000:

If you have a steady income and can afford a reasonable monthly payment towards your debts, you should consider a debt management plan.

If you are struggling to keep up with repayments, you should try do it yourself debt negotiation.

Debts of $10,000 or more

If you have a steady income and can afford a reasonable monthly payment towards your debts, you should consider a debt management plan.

If you are struggling to keep up with payments and possibly considering bankruptcy, you should consider using a debt settlement company or trying do it yourself debt negotiation.

Why Debt Negotiation Only Works In Some Circumstances

You will see from the above information that do it yourself debt negotiation is not recommended for situations where you have a reasonable income and can afford to keep up with repayments on your debts. This is because the negotiation process depends on getting the agreement of creditors to write off a large part of the debt, and they are never likely to agree to this unless they think it is the most they are able to get. If you are in real hardship and could possibly go bankrupt, they will view a negotiated settlement as a way of getting something rather than nothing.

Do It Yourself Or Use A Professional?

Any professional debt company offering any debt solution will charge you something for their services one way or another. The better US debt settlement companies will usually take a proportion of whatever they manage to save you as their fee. This is OK because it means you only pay them in proportion to how good their results are, but with large debts, these fees can still be substantial.

The obvious advantage to going down the do it yourself route is to save on paying any fees and keep the full benefit of the settlement figures you manage to achieve. The flip side of this is that doing it yourself could mean the reductions you achieve on your debts are far less then a professional would have managed.

How Does Do It Yourself Debt Negotiation Work?

The main system used to reach debt settlements is that you stop making payments to your creditors and begin negotiations to try to agree to settle the debt for a proportion of what you owe. One of the main incentives for creditors to agree to settle is the promise of a quick repayment of the remaining debt. This usually means a prompt payment of a lump sum covering the full agreed settlement amount.

When you get a debt settlement company to work for you, they will get you to make regular monthly payments into a separate pot, and this builds up and is used to make these lump sum payments. Sometimes this is not enough and some settlement companies will make the lump sum payments for you, and you then have to pay them back in instalments through your settlement plan.

The time it takes to reach the best possible settlements will vary enormously from creditor to creditor. Some will settle within weeks and others may take years. One of the main factors that will dictate how creditors react to your approaches is what their policies are with regard to bad debts and charge offs. Each creditor will have a different system for dealing with unpaid debts and the timescales and procedures they work to are crucial in determining at which point they are most likely to agree to a settlement. Unless you know this kind of information, achieving substantial reductions on your debts is unlikely.

Do It Yourself Debt Negotiation Guides

If you choose to try debt negotiation yourself and do not have previous experience in this area, you are going to need some detailed help and advice if you hope to be successful. There are numerous guides and e-books available, offering to help you through this process, though you must choose carefully because many are not actually detailed or practical enough to really make any difference.

There are a few excellent guides and courses which offer very specific, detailed guidance, from letter templates and telephone scripts to training videos and one to one advice and support. There are a range of options that all offer guidance that will take you successfully through the whole process. You can find a list of the top recommendations for the best guides on the main debt negotiation page of this website:

Go To The List of Recommended Guides On Do It Yourself Debt Negotiation

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