Diy Debt Settlement - Can I Settle My Debts Myself?

Working out how to pay off your debts is no easy task and most of the time you end up having to do it without the benefit of specialist knowledge

. Like the majority of people with debts, you end up muddling through, sometimes making things better, and sometimes making them worse. So when you first do your research on all the different ways to pay back debt and come across debt settlement, it sounds so simple you get excited. Your creditors agree to your debt settlement proposal and you can look forward to getting up to 80% of your debt written off and walking away.

In reality however nothing could be further from the truth. Creditors are intent on getting you to pay 100% of the debt by any means possible regardless of the stress and heartache they cause you. If you have never had to negotiate a debt settlement, chances are you're about to play right into their hands. The following are some of the pitfalls that can happen if you are inexperienced at dealing with the tactics of unscrupulous creditors and have a go at a DIY debt settlement.

Taking your cheque and not giving you a settlement

Even though you spoke to your creditor on the phone and they agreed to your debt settlement, they end up going back on the deal. You send them a cheque with your debt settlement offer letter and instead of confirmation that your debt is paid off, you get a letter thanking you for the payment and requesting a date when the rest will be paid.

Deadlines which cannot be met

Your lender accepts your debt settlement proposal and tells you it will send an agreement that you have to sign and return within 14 days. Trouble is, the letter arrives 12 days later leaving you only two days to get it back to them. It's clear this was deliberate because the postmark is dated only the day before but the letter is marked well over a week ago. You quickly sign and post the document, but to no avail. Your creditor 'claims' it hasn't arrived in time and demands 100% of its money back.

Misinterpreting terms and conditions

While writing letters to your creditors you try and make them sound formal and professional, but you haven't realized some of your comments could be open to misinterpretation and provide a loophole for your creditor to use to back out of agreements. For example, you promise to pay your creditor a sum of money on a particular date. You initiate a BACS transfer on that date, which will take three days to clear. Your creditor then claims you broke the terms of your agreement as the funds were not cleared on the date you specified. They thank you for your payment and demand the remaining balance of your debt.

Tying you up in knots on the phone

You're faced with a rude aggressive creditor who claims you lied on your original application form and threatens to take you to court. Frightened and believing you must have filled in the form incorrectly by accident, you agree to whatever they want. Only when you get off the phone do you realise you've been lied to. Your copy of your application form shows you filled it in correctly and the creditor lied to scare you into agreeing to their demands.

Hassling your friends and family

Thanks to the generosity of 73 year old Great Aunt Nelly you're finally able to offer a debt settlement to your creditors and get rid of the debt that has been dragging you down for years. Enthusiastically you tell your creditor Aunt Nelly's offer and they sweetly ask for contact details to arrange the debt settlement payment directly with her. Suddenly Nelly starts getting nasty phone calls requesting she pay for the full 100% of the debt. She rings you in tears claiming the last call was so bad it set off her angina and she's going to scrape her life savings together to pay off the whole debt and get rid of them.

Creditors have one thing - and only one thing - on their mind and it's not debt settlement; it's to get the full amount of the debt from you by any means they can. If they have to employ nasty tactics to do so they will. Unless you have a strong constitution, understand the tactics they could come at you at and have good negotiating skills that will help you to avoid falling prey to them.

by: Robert Rennie

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