Settle credit card debt » Collection Agencies

Settle Your Own Debt ‘Only If’

admin — Fri, 23 Jul 2010 20:44:19 +0000

Time is valuable. Most people can not afford to lose time from work to negotiate settlements on their debt. Phone calls, and correspondence must to be answered. Complete contact must be kept with creditors and collection agencies, every detail of the debt being negotiated on must be known. Can everyone afford to do this, YES, if they are home unemployed! Arrangements sometimes may take up anywhere from one day to six months , this is why I say negotiating debt is time consuming.

Collectors will test your patience. The phone calls become unbearable, one call after
another, collection agencies do not give up. These calls come at all times of the day, and they are computer generated, knowing the stress you are going through just being in debt are you willing to add extra stress because you think you might know what you are doing? This is where many people quit their own efforts and contact debt relief agencies. Trust me I have the gray hair to prove it, collection calls are not easy to deal with.

If you are a car mechanic chances are I will trust you with the brakes on my car. I do not think I will go to my local garage to learn how to become debt free. The know how is not only how to speak, most of us know how to negotiate, it is not complicated. Working on oyur own debt is knowing when to say certain things and when not to. negotiating is like a boxing match, one must know when to take a punch and when to hit back. This is called experience, just like that car mechanic who knows when to change those brakes, debt negotiators know when to go in for the kill. Unless you are extremely good at knowing when to punch and when not to, debt settlement is not the business for you.

The contacts. Most people laugh when I mention this, the fact is this business is repetitive. What to say, what to do and whom to work with. Believe it or not, there are nice people collecting debt. It takes time, patience and the know how to find these people. Once you find them, you never let them go. You make your enemy your ally, in this case debt negotiators learn to work with debt collectors. They work up a rapport, they sometimes become friends, that is why it is so important to seek the proper help.

If you think you have what it takes to negotiate on your behalf, by all means go ahead. Keep in mind the road is not going to be easy but not impossible. It is highly rewarding to know you can make a difference in peoples lives, as a debt negotiator I take great pride in helping those in real need of debt relief, people with a real hardship. I wish you great success in your efforts.

By: Dan Delgado

Now Is The Time To Settle Unsecured Debt

admin — Sat, 03 Jul 2010 02:23:49 +0000

Debt settlement has been designed to help people whose unsecured credit accounts has fallen behind, it is an aggressive plan to help save as much money as possible in the least of time. The current economic situation of our country is dictating more and more banks seek solutions that will help them avoid losing money. Now is the time to go after settlements if unsecured credit accounts have fallen behind.

Settling unsecured debt is not easy, it is a process of tough negotiation, of patience and of knowledge. Today more banks are offering to settle accounts that are delinquent anywhere from ninety to one hundred and sixty days, this period is essential for any person looking to settle his/her accounts. First the banks want to settle in order to minimize losses and also not to send accounts to collection agencies.

Aggressive is the word that best describes debt settlement or debt negotiation, this is in fact because all accounts have a window of opportunity to be settled on as I mentioned before. This does not mean that if an account is referred to a collection agency it cannot be settled on. Yes, accounts can also be settled with collection agencies and sometimes it is better an account is let go to them. here is where the knowledge and patience part of negotiation comes into play because collection agencies play harder than original creditors.

Collection agencies will be relentless in their pursuit of a client, they will call a persons home, job, neighbors, etc.. If there is an excellent negotiations firm behind the client this stress can be minimized. Reason number one debt settlement companies or firms came into existence, to lessen clients stress.

In the case an account cannot be settled with the original creditor or a collection agency it may have to be settled with a collection lawyer. Accounts have a natural cycle and no one can stop it, the only action that can stop it is to negotiate settlements. Lawyers are extremely adept using scare tactics to bring clients into paying amounts of debt that have accumulated interest rates, late fees, etc… They will threaten with lawsuits, liens and many more tactics to get a person to buckle down and pay amounts of money not originally owed. Many actions by lawyers can also be avoided if addressed correctly by your debt negotiations firm.

Bottom line is, debt settlement is aggressive on both ends of the stick. Clients must learn to be as tough if not tougher than collectors. Patience is of the essence and not all settlements are to be taken first shot. Experience negotiating debt must be displayed, or collectors will eat a person alive. There are many firms with a reputable reputation that will do a fine job, that will keep stress levels down and not charge an arm and a leg for their services all we have to do is look and investigate far enough and we will find the solution that will help us eliminate our debt in the least amount of time possible.

By: Eric Gartle

Debt Settlement In Florida

admin — Sun, 20 Jun 2010 11:57:57 +0000

Thousands of people across the country are faced with overwhelming debts on a daily basis. Many of these people feel that filing for bankruptcy is the only viable option to remove themselves from debt. Fortunately, debt settlement, which is also known as debt reduction or debt negotiation, exists. It is a way of reducing debts that does not involve completely destroying a credit score.

Debt settlement is a new way of dealing with debt and credit problems. It involves negotiating a debt settlement problem with a creditor. Typically, a debt counselor will help in the negotiation of the plan to remove debts. This whole concept is a legitimate solution for consumers whose credit card debt is overwhelming. The concept is equally useful for people who have fallen behind on payments as it is for people who are barely able to afford the minimum payment.

Unfortunately, no solution to debt is completely free from potential downsides. Debt settlement, like other options, will have a negative effect on a person’s credit rating. Fortunately, this will be less drastic than if an individual files for bankruptcy. There is also the possibility that the creditor will take legal action to collect the full amount owed to them. The final potential downside is that creditors will continue to call until the debt is settled.

The potential for negative consequences is diminished in Florida due to the state’s favorable debtor laws. Florida provides its citizens with numerous rights and protections concerning past due amounts on unsecured accounts such as medical bills, credit cards, repossessions, and personal loans.

All states have laws that require collection agencies to stop contacting a consumer if the consumer sends a Cease and Desist letter or a Power of Attorney letter which tells the collection agency that a third party is responsible for handling all communications with the creditor. Florida protects its citizens more by limiting the harassment from collection agencies as well as the original creditor (this is the bank or credit card company). The same laws which regulate and restrict what a collection agency can do also restrict the harassment abilities of original creditors.

In addition, Florida has set up laws that frequently completely protect a debtor’s wages and homes. Wages are protected by the state’s wage garnishment laws. This legal structure gives a creditor more of an incentive to settle.

Many cases, despite all of these protections, do end up in court. This is because creditors always have the right to sue a debtor as a means of collecting a past due amount. This is true regardless of whether the consumer has taken any action to resolve outstanding debt.

By: Joseph Devine

How to Beat the Bill Collector With Sample Cease and Desist Letter

admin — Tue, 27 Apr 2010 10:10:57 +0000

Debt collectors are highly motivated to convince debtors to pay the debt because they frequently work on a low base pay plus commission. This business model has created the reputation for bill collection agencies that we know today.

The collector might engage in threatening behavior and harassment. However, like any other business they are governed by laws that prohibit certain abusive practices.

There are three reasons for a debt collector to contact you: your creditor has not received a payment from you within the time frame discussed in the contract; you are a victim of an identity theft meaning someone used your identity to obtain credit and didn’t pay it off; and finally, you might be contacted by collectors who are looking for someone other than you.

When contacted by a collector, take as much information as possible from the caller. Ask for the name of the company, address, the caller name, fax and phone number, amount owned, and the name of the creditor who passed your account to them. Also, tell them you expect to receive a notice in the mail concerning this debt. The last step is very important because you need to have proof of the debt in question in writing.

If you discovered that the debt is not yours, never pay it off simply to get rid of the collector. Also, never ignore the collector either. They will not stop contacting you, and may even file a lawsuit against you. If you are repeatedly being contacted by a collector looking for someone other than you, it may be considered a form of harassment. To stop this you need to send them a letter requesting to cease calls.

If you established that the debt is yours and you don’t feel comfortable dealing with a collector via phone, tell them you want all future correspondence in writing. You need to send this request via a certified mail and request a return receipt. If you want to allow calls only between 5pm and 6pm, tell them about it in the letter. By law collection companies are required to respect your privacy and will have to cease all phone calls to your home, relatives, neighbors, and work.

Once you have their claims in writing it’s easier to seek legal help, and keep records of your correspondence. Send all your responses to bill collectors via Certified Mail. This way you will have proof of receipt by the addressee.

Remember that the amount they claim you owe is negotiable. You can negotiate the total amount due, number of payments, and the payment deadline. Once you worked out the payment plan, request it in writing.

What a debt collector CANNOT do:

1.) Use deceptive practices. For example, threaten you with arrest or trick you into paying for collection calls.
2.) Use obscene language.
3.) Call you at work after you tell them that your boss does not approve these calls.
4.) Deny you the right to receive a written notice (within five days after your first phone conversation) that would tell you how much you owe and the name of the creditor that says you owe the money. If you do not receive the notice within five days, call the collection agency and ask for its address and fax number. Then, send a letter to the collector noting its failure to send you the required notice. As a minimum, make a note in your file.
5.) Refuse to give its name and the name of the collection company when asked.
6.) Put a debt on your credit report if you file a dispute. It must validate the debt by obtaining a verification of the debt or a copy of a judgment from the creditor before continuing their collection efforts. The results of the investigation must be mailed to you.

SAMPLE CEASE AND DESIST LETTER

The cease and desist letter has legal stature based upon the Fair Debt Collections Practices Act at section 805. You can read it for yourself here. The Fair Debt Collection Practices Act applies to both the agency and to attorneys who collect two or more debts per year. This law does not apply to the original creditor. However many original creditors will honor your request to not be called.

Please note that when a consumer debt collector receives a cease and desist letter they may move the account to legal status. This means that if they intend to sue you, the cease and desist letter will prompt them to bring suit immediately. So if there is an alternative way to stop being bothered by their calls, like using an answering machine, I’d suggest that you try it first. If there is no alternative then send the cease and desist letter.

Send the letter via certified mail with a return receipt request. Keep a copy of the letter for your files. The letter may take a couple of weeks to work its way through the collection agency’s system before your number is taken out of their automated dialers. Even after they receive the letter they are allowed (under law) to contact you one time to notify you of their intent.

The below letter is easily personalized by utilizing a word document program. Although not the cease and desist letter currently utilized by Credit Restoration Consultants, it will serve to notify consumer debt collectors of your intent and purpose. Although protected by copyright, single user permission is granted to individuals in the self help credit restoration process.

My Address
My City State and Zip

December 30, 2001

Acme Collection Agency
12345 West Main Street
Any Town, AL 30311

Dear Sir/Madam:

This letter is forwarded to your collection agency reference account number 123456 and the dunning collection notices/calls recently received. Insofar as your agency is a debt collector pursuant to section 803 of the Fair Debt Collection Practices Act, you will be treated like one. Therefore, the Fair Debt Collection Practices Act – and all of its relevant provisions – will be invoked.

YOU ARE HEREBY NOTIFIED that this is a disputed debt pursuant to section 809 of the Fair Debt Collection Practices Act. The specific content of said dispute was recently stated – verbally – to an individual at your agency who refused to provide their name upon request thereof. Pursuant to the FDCPA, you are prohibited from dunning a debtor when a specific debt is disputed.

YOU ARE FURTHER NOTIFIED that this is a disputed debt pursuant to section 623 of the Fair Credit Reporting Act. It is my belief that your agency has illegally reported this disputed debt to Equifax, Experian, and Trans Union. If this is the case, I will most certainly litigate an action against your agency insofar as it has willfully reported a disputed debt. Pursuant to the FCRA, your agency must notify the consumer reporting agencies of any disputed delinquency immediately upon notification thereof. A further cause of action may exist for failure to perform this ministerial task.

YOU ARE FURTHER NOTIFIED that I desire no further communication with your agency under section 805 of the Fair Debt Collection Practices Act. Your agency is to CEASE and DESIST all further communication immediately. Should I receive another piece of dunning correspondence that does not comport with the provisions of the FDCPA, I will immediately initiate litigation against your agency.

Sincerely,

John Q. Public

THIS IS AN ATTEMPT TO MAKE A DEBT COLLECTOR OBEY THE LAW. ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE. THIS COMMUNICATION IS FROM AN ALLEGED DEBTOR REFERENCE A DISPUTED DEBT.

By: William E. Lewis, Jr.

Can Creditors Really Call My Neighbors Or Family?

admin — Sun, 25 Apr 2010 00:00:34 +0000

The fact is, that collection agencies are known for bending if not down right breaking the “Fair Debt Collections Practices Act” to try and collect on a debt.

But the questions is: “Can a collection or creditor call a neighbor or family member to collect a debt?”

And the answer is yes.

In most states a collector or creditor can only call a neighbor or relative once and they are only allowed to find out where you live, what your phone number is, and where you work. They are not allowed to say they are collecting a debt, the collector is not to tell anyone other than you or your lawyer that you owe money.

How can I prevent this ?

A good way to protect yourself from this happening to you, would be to write your creditors a “Cease and Desist Letter.” Telling the creditors where to contact you. A creditor can not call you after you tell and write them a letter telling them to stop contacting you at a certain number or all together. But if you try to break off all contact that might spark them to pursue possible legal actions like judgments, liens, or garnishments.

So it is normally best to give them a way to contact you, if it is a legitimate secured or unsecured debt that you owe. Whether it is your attorney or a debt management or negotiation company with your limited power of attorney.

Creditors can not contact you at work if they know your employer disapproves of those types of contacts. You can also normally get a collector to stop calling your cell phone number if the collector knows it will cause you a higher bill, by taking up your minutes. Of course you need to check any state laws that may be different but the FTC.gov sets the guidelines.

By: Jeff T Forman

Credit Card Collection Agencies Secrets

admin — Fri, 16 Apr 2010 10:31:23 +0000

Have you ever wondered why collection agencies keep calling you more often? There are numerous situations that credit collectors use to get the money you owe.

But let’s start from the beginning when you get your credit card. Obviously everyone knows that you need to pay your credit card on time. However, situation is not always the same when it comes repaying your credit card debt.

Once you are late on your credit card, Credit Card Company will alert you and give you a chance to work with them to pay off your debt. This is the best chance ever, if you credit card company is willing to work with you. In most cases you will receive late notices and your credit score will start to take a hit. If you are one day late on your credit card payment, your credit card company will report this late as 30 days late on your credit report. Afterwards; you may receive another notice to call their credit department to help you out with your situation or work out some re-payment plan.

If there is no action from you or credit card Company, your unpaid balance may end up in collector’s hands. Collections agencies are commission based most of the time. They have pre-arranged profit negotiations with credit card companies and typically credit card companies will take 40%-60% from your balance you own. If collector is able to collect more from you, they keep larger chuck of the profit for themselves.

Credit card companies are very serious about privacy of their data and most of the time dictate how your information should be transferred before collector can view your name, address, SSN number, etc.. Some of the top requests are SSL (Secure Server Locket), 128 bit encryption, FTP encryption and password, etc. With all of this and more, there are few credit collection agencies that spend money on more sophisticated software as it is very costly for them.

Once your data is opened or extracted from credit card company list, collection agencies use their own scoring model to determine how quickly you are able to repay your debt if they call you. They look into your credit score, how many tradeline you have, balances, late payment if any and so on. Upon all the data, their own credit scoring model will give them number as how quickly you are able to repay your debt.

But did you ever wonder why they keep calling you more and more? Collection agencies will more likely call more those will higher credit scores than those will lower credit score. If you have a good credit score, you are a high candidate for a repayment or settlement. You are more likely to settle than someone with lower credits score. However, if you have good credit score, collection agency will settle around 40% of the balance, as you owe them 60%. When someone with low credit score and same balance may be able to settle at 60%, as they will owe them 40%.

If you have a good credit score, you are more willing to maintain your credit rating. Collection agency knows this and offers you only around 40% settlement as well as they will call you more often to collect.

Once you have a low credit score, collection agency will try to reach you few times but eventually gives up on you for a few months as they know that you will not repay it back quickly for them to claim a profit.

Most financial professionals will tell you that maintaining your credit score is very important, however collection companies exploit that and use it against you. Yes, they are willing to even settle at 60%, but they will not do it as they will loose their profit. This is a game with numbers and profits.

If you have a good credit and fall behind, work with your credit card credit department and make sure they will not turn your unpaid balance to collection agencies, otherwise you will face numerous phone calls for a credit you build so well.

By: Martin Lukac

Debt Settlement Facts and Benefits

admin — Mon, 12 Apr 2010 01:02:28 +0000

Even if you are watchful of your budget, things do happen. Particularly tragic to a household budget is a large, sudden debt, or the loss of income which may hinder your ability to repay.

Debt negotiators may be able to help you come to equitable settlements for your debts.

Professional debt negotiators can work with your creditors to explain the situation and to negotiate on your behalf. Even if your creditors refuse to offer a repayment plan that suits you, don’t jump to the ‘bankruptcy’ mind set. Recent federal laws now require credit counseling before proceeding into bankruptcy. But there are also federal laws to help protect you from unscrupulous collection agencies.

The primary reason creditors may accept a settlement is because it is cost effective for the creditor. The degree of the discount (how much they will forgive) will vary case-by-case; therefore, a creditor will take into account many factors when determining their bottom line on accepting a settlement.

They calculate the probability of recouping the debt; either by a collection agency or via legal action, versus the amount of a settlement offer.

Before they agree to any settlement, they will often consider your income, state of residence, age of the debt, type of debt, and your assets.

Professional negotiators will appeal to your creditors that it is in their best interest to settle the debt.

Major difference between Debt Management and Debt Settlement

Debt Management

In a debt consolidation program, also known as a Debt Management Plan (DMP), the debtor pays back 100% of their debt plus interest. Interest is commonly reduced to the 8% to 10% range. Additionally, most Debt Management Companies have a monthly service fee tacked on to the monthly payment. Most people pay back about 130% of their debt over 5 to 6 year period. Debt Management has a moderate affect on a good credit file and will improve most poor credit files. But, a Certified Debt Arbitrator is qualified to explain both programs to you and will be able to provide you the differences in monthly payments as well as the pros and cons of each program.

Debt Settlement

In a Debt Settlement program, most clients pay back an average of 54% of their total debt, including all agency fees as well as accruing fees and interest. This 54% figure is based on the client’s starting balances.

Debt Settlement has a major impact on good credit but will improve credit for people that are 6 months or more past due. This improvement in credit profile is caused by bringing outstanding balances down to a ZERO balance.

Is debt settlement right for you?

Some consumers get so deep into debt, that bankruptcy seems their only way out before debt takes over their lives. Unlike bankruptcy, debt settlement is a far simpler process in comparison, and has less of a ’stigma’ attached to it.

By: Toni Phelps

Facts You Should Know About Before Negotiating Your Credit Card Debt

admin — Tue, 02 Mar 2010 17:03:58 +0000

Many people claim it is the debt relief programs they join that are at fault for their pain and suffering, in some cases it is true. What most people do not understand, it is their own responsibility to settle their accounts. I will explain what I mean in detail. When a person wants to negotiate or settle an account he/she is already delinquent on, what is most needed to settle such an account? MONEY!

That is right, money must come along sooner than later to be able to negotiate on a delinquent account. First of all people get in credit card debt because they have no money. If they had money in the first place they would buy everything they needed with cash. If you have no money, do not buy things you do not need. If you live by this rule it would be highly unlikely that you will end up in credit card debt. Lets assume you have delinquent credit accounts and you want to negotiate settlements on them, here is what you must be aware of:

1) Find an affordable agency to help you out. Find an agency that does not charge outrageous fees. Remember you are already in debt, some agencies will only get you deeper in debt. Find an agency with no retainer fees, monthly maintenance fees, or high commission rates. Shop around, do not join the first agency you speak with. Widen your horizons, do your homework, expensive does not always mean the best in the debt settlement industry.

2) Stay away from agencies that promise you the world. In the debt settlement industry there is nothing for certain. Do not let an agency tell you they can save you so much, that is a lie, not every person receives the same treatment from creditors or collection agencies. Discounts are given on a case by case scenario. Beware of false promises.

3) Do not ever under the advise of any agency stop making your payments. Whatever loan you are making payments on, it is illegal for anyone to suggest to you to stop making payments on it. If this advise is given, beware of the agency. This is only going to get you into more debt. Even though payments are not made, interests rates will go up, late fees and other charges will still continue to accumulate.

4) Do not send any agent any money unless you are absolutely sure they have a settlement letter in writing for you. Here is where the trust factor comes into play. If you have joined an agency after you have read all the advise given before, then you must trust your debt relief agency. Keep this in mind, most agencies will not forward a settlement letter to you unless the commission money has been paid to them. If you pay the commission money to your agent demand they fax a copy of settlement letter right away.

5) Most people fail to settle their accounts, why? Lack of money! Do not believe you have 24 or 36 months to settle your accounts. I have seen people get sued only after a few months of delinquency. That is a fact. Most agencies will lie about this fact. Be very careful, some people do get sued, have their wages garnished, leans on their properties, etc.. There must be money to settle your accounts somewhere along the road. The best time to settle your accounts could be around the sixth month of delinquency. Will you have the money then to settle on all your accounts let alone one account? In most cases I do not think so. By now you know why I told you before there is no one else to blame but yourself for the troubles you have brought upon yourself if you have stopped making your credit card payments, it is not your agencies fault, it is the lack of funds to settle with that is doing the number.

6) Let us say you do have funds to settle with. Great. Bad news is not all credit companies or lenders settle. Do not let your agency of choice tell you because you have funds to settle with you are going to come out smelling like a rose. That is a lie. Yes, you will probably settle many of your accounts, reach payment plans on others, the likely hood of getting sued will diminish. It does not mean because you have money to settle with you are going to get everything you want. That is why it is called Debt Negotiation, because that is exactly what it is, a compromise, two sides have to agree, or come to a common ground and then settle. Debt settlement in most cases is not a complicated process, but some negotiations take more time than others even if there are funds available to settle with.

7) After all this you are wondering if it is really worth it to have an agency negotiate on your behalf. I say you can negotiate for yourself. My question is, do you have the know how, the contacts, the experience or the time to do it on your own? If you answer yes to all these questions, then my answer is, in the form of a question, why are you in debt in the first place? Most people think they can negotiate on their own, some can to a certain extent, but remember what I asked before, are you really ready for it?

Promises, false promises. No agency can keep your creditors off your back 100%. Big lie, people are told this as a hook to join an expensive debt settlement program. We will handle all your creditor calls, big lie. 80% of the time your calls are not followed up on. We contact every creditor once you join our program, big lie. If that was done then you would probably have to settle your accounts all at once. We can save you 80% off your total deb, big lie. I have been in this business for many years, no one knows how much they can save anyone at a specific time, all we can go on are averages of many negotiations with the same company. You will not get sued, our program will allow you 36 months to settle your accounts, big lie. No one knows have much time before legal action is taken, any time you decide to stop paying your creditors you are rolling the dice on legal action. We will refer you to legal council if you get sued, big lie. You will get sent to your local court house to file a legal answer.

9) Be careful of all promises and lies, there are more but I can continue writing forever, just do your homework, stay away from fancy agencies that promise you the world. If I were in debt I would rather hear the truth, and you?

By: Eric Gartle

Credit Card Debt Negotiation Tips

admin — Sat, 27 Feb 2010 03:04:18 +0000

One thing many people don’t understand is that they have the advantage. Most consumers run from debt collectors. Just the mention of a collection agency strikes fear in the hearts of the masses.

But, you have something the collector wants. They are basically begging you to pay. So if you get the image of a beggar calling you to ask for money in your mind, the collection agent doesn’t seem so intimidating. I certainly don’t want to down play the seriousness of the situation. They do have recourse, and it can be dire. But the fact is that the process is slow.

You can get them to give you the deal you want. You have to be firm, professional and show some fortitude. They are always going to tell you no. Relax, take a deep breath.

I really want to encourage you to NEVER talk to a collector on the telephone. First, most people can collect their thoughts a little better in a letter. It gives you time to think and make rational, unemotional, unpressured decisions. Second, everything you do with the collection agency needs to be written. If you use the mail everything is documented and date stamped. They can’t dispute it.

Most collection agencies pay literally a few cents on the dollar for old debt. Depending on the age, 1-7 cents may be average. On debts that are out of statute, they have paid one cent or less on the dollar.

Start your negotiation at 25% or less. If you owe $1000, offer $200 or $250. Many will accept quickly because they are making money can close out the account.

If the collection agency has added “fees”, don’t include them in the negotiated amount. Only negotiate on the original amount of the debt. Don’t seem to eager. Don’t volunteer any information. Never give them your bank account number, your employer or that inevitable “other number to contact you at”. Oh yeah, and why are you talking to them on the phone?

Time is on your side. Be firm, and get the deal you want.

By: Ted Batron

Settle Unsecured Debt ASAP

admin — Sun, 14 Feb 2010 06:57:11 +0000

It is true creditors can claim much of the unsettled debt as a loss and still not take a big hurting, but in these times of recession every penny they collect from their debtors is better than none at all. Usually a creditor will charge off an account about 180 days delinquency, this means the account will be forwarded to a collection agency or sold to a junk debt buyer. Once this happens settlement percentages will change, some for the best some for the worst.

Collection agencies and junk debt buyers are now more and more buying old debt from creditors. In the past they would serve as a third party collecting on the creditors behalf and earn a percentage on the money collected from the debtor, some collection agencies and creditors still handle business in such a fashion. Others now buy the debt directly from the creditors for pennies on the dollar and claim they cannot settle the debt for less than 80 or 70%, thus making a tremendous profit for their efforts. Some of the junk debt buyers, who also buy old debt for pennies on the dollar and hire debt collection lawyers for their collection process. There are ways to get better deals from these companies, but one must know what to do to achieve them.

Some accounts depending on the creditor believe it or not are better off going to collection agencies for better settlements. There are a handful of creditors that under no circumstances will negotiate a reduction on debt owed. In this case a negotiations professional can inform you as to which accounts to negotiate with the original creditor and which ones to negotiate with a collections agency.

The debt settlement industry is forever changing, dictated by the decisions taken in the credit card company board rooms everyday. Debt negotiators are aware of these changes as their job is to speak to these very companies everyday. No debt settlement service can exactly estimate how much money anyone can save by negotiating on their debt for the same exact reasons I just mentioned, the best way to know this is to engage in negotiations. Once a negotiation is underway your debt settlement negotiator will have a better idea of the probable savings .

One fact is true the more active a person is in pursuing agreements with their creditors or collectors the sooner all the debt will be settled. Hiding for the most part will do no good as interest rates, penalties and late fees will continue to accumulate. All creditors, collection agencies and junk debt buyers will factor in this added charges when collecting on the unpaid accounts.

Therefore it is extremely important to remain proactive in the pursuit of arrangements to eliminate all debt. One of the most important decisions is to find the professional help which will help you do it as fast and as efficiently as possible.

By: Dan Delgado