Should I Do Debt Settlement on My Own?
Debt Settlement: Can It Be Done On My Own?
When you begin to tackle your debts, there’s no single, perfect way to go about it.
However, there are certain traps that you should try to avoid.
If you plan on arranging a debt settlement yourself, there are plenty of factors to consider.
Although it is possible to organize your own debt settlement, it isn’t always advisable.
Due to the complications often involved, you’ll want to ensure you’ve got everything covered if you’re considering resolving debts via an early settlement agreement.
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When can I get an early settlement?
Creditors will sometimes offer borrowers the chance to settle their debts early at a reduced rate, but you may need to ask them.
When you make an inquiry, you may be surprised to learn that you could minimize your overall debt by paying off some debts early and save money in the process.
In other cases, creditors will offer you a full and final settlement figure if you’re struggling to pay your bills.
If lenders think you’re going to struggle to pay the remainder of the debt, they may pass it on to a collection agent, for example.
Often, they will accept a reduced sum to clear the debt.
As you can see, there is more than one way to secure an early settlement.
If your creditors don’t offer you the opportunity to settle your debt early, you can approach them and ask if they’re willing to reduce the debt in return for a one-off early repayment.
Is a debt settlement final?
Unfortunately, a significant number of people are caught out by misleading offers to settle a debt.
They pay a relatively large sum, thinking the debt is then fully paid off, only to find that collections activity is still on-going and they are still liable for the remainder of the debt.
If you’re asking, should I do debt settlement on my own, this is one of the main reasons it can be inadvisable.
Negotiating with creditors and collections agencies can be tricky and the law regarding contracts and debt management can be even more complex.
Before you part with any money, it’s essential to ensure that the agency or company attempting to collect the debt have the legal right to do so.
Furthermore, you’ll want to ensure that they have the legal authority to offer or accept a reduced amount in full and final settlement of the debt.
In some cases, the original creditor will sell a debt to a collection agency.
If so, the agent should be able to prove ownership of the debt.
Alternatively, a collections agency may be acting on behalf of the original creditor.
In such cases, the original creditor still owns the debt and should be willing to confirm that the collections agency has the authority to negotiate a settlement.
Remember – all debt settlements should be negotiated and agreed in writing.
When you have everything in writing, you can use it as evidence of the agreement if there are any disputes later on, so don’t be tempted to enter into an agreement over the phone.
Avoiding financial scams
Another reason to avoid handling your own debt settlements is the potential for fraudulent activity and scams.
Sadly, millions of people fall victim to these types of tricks every year and they can have devastating consequences.
Sophisticated scams can be very difficult to spot but, if an offer for an early settlement seems too good to be true, it probably is.
Getting help with debt settlements
When you work with an experienced debt advisor or trustee, they have the expertise required to spot scams and make enquiries on your behalf.
In addition to this, a professional debt counsellor or trustee may be able to negotiate a lower repayment figure than you can obtain on your own.
When credit agencies are dealing with individual consumers, they will try to pressure you into paying as much as possible.
However, they are aware that trustees and debt advisors have more experience in the area and will know when a settlement figure is higher than average.
Due to this, accessing professional support can be the most straightforward and secure way of arranging debt settlements and early repayment agreements.
To learn more or to access help with debt settlements and debt relief services, get in touch with our friendly team today.
Simply contact Bankruptcy Canada today on (877) 879-4770 and start reducing your debts now.